ASIA WHEAT ROUNDUP: Rains improve Australia crop in May, high prices pressure demand

Mounting weather concerns and bullishness from offshore wheat markets lent strength to Australian wheat prices in May, though a weaker currency and significant rains across dry cropping regions in New South Wales boosted near-term crop prospects and encouraged more old crop sales, causing prices to decline toward the end of the month.

Rains improve crop sales

Australian Premium White ended the month at $284/mt May 29, up $10/mt from May 4, while Australian Standard White rose $7/mt to $276/mt during the same period, according to data from Platts, part of S&P Global Energy.

Prices extended their gains from April, as grower sales remained limited for much of May with winter crop sowing in full swing, according to multiple Australian trade sources.

Concerns over lower production in the 2026-27 crop season (October-September) have also not abated, though prospects are looking much better in the driest cropping regions of northern New South Wales and Queensland, thanks to ample rains across late May, with some areas receiving up to 100 millimeters in the month.

"There is definitely more old crop selling, and the NSW surplus is starting to come out from growers. The season and the El Nino narrative have been turned on their heads. All the exporters and domestic buyers are getting calls from growers and their agents. This is happening right across the East Coast," a Victoria-based trade source said late May.

"This could change planting intentions and lead to more barley and even wheat being planted in June," another Perth-based trade source said. "Everyone has got very bearish domestically with all the rain we have been seeing."

Other Asian trade sources also pointed to a weaker Australian dollar, which fell below 72 US cents mid-May, as a factor behind softening prices.

However, further bearishness may take time to reflect in Australian old-crop offers in June, as suppliers could opt to hold onto their grain and roll their profit into the new tax year, which begins in July, the same source added.

Black Sea carryout competes into Asia

Black Sea wheat remained the most competitive origin to Asia, with a carryover from the 2025-26 season observed into new-crop shipments, according to several Black Sea traders and brokers.

Meanwhile, Australian wheat offers have risen above $300/mt CFR in May, at least $15/mt higher their Black Sea counterparts, which weighed heavily on regional appetite, multiple Asian trade sources said.

Delivered prices of Canadian milling wheat to Southeast Asia also strengthened, tracking rallies in the US futures market, though regional demand was robust as Canadian Western Red Spring prices remained attractive compared to US spring wheat and Australian hard wheat, a Singapore-based grains trader said.

"Buyers are looking into new-crop shipments now, but there is limited trade as farmers in Canada are not committing to much new crop sales at the moment besides focusing on planting," the same source added.

Some feed wheat demand emerged in South Korea after weeks of inactivity, with three buyers entering the market mid-May to extend September arrival coverage, according to South Korean trade sources. Notably, the trades are part of only 5 known feed wheat trades to South Korea in 2026, as buyers had remained largely sidelined after purchases at much lower prices in December 2025.

The average trade price across five captured feed wheat trades to South Korea in December 2025 was $257.91/mt CFR, while the average trade price in May 2026 was over $30/mt higher at $291.24/mt CFR, based on captured trade data by Platts.

The Philippines extended Australian feed wheat coverage up to September shipments, with some buyers benefiting from softer Australian wheat prices in late May, while Thai feed buyers remained largely absent amid high wheat prices.

As wheat prices strengthened, so did the spread between feed wheat and feed corn on a delivered basis to Asia. As of late May, the feed wheat-corn spread has widened to over $20/mt CFR to North Asia, based on captured trade data by Platts.

What's next in Asian wheat markets?

Some bearishness is in store for Australian wheat prices after strong rainfall across May, particularly on the East Coast, which should boost new crop prospects for the next marketing year, according to Australian trade sources.

China's domestic wheat harvest campaign will enter full swing early June, with 35% of national acreage already harvested as of June 2, according to China's Ministry of Agriculture and Rural Affairs. Despite heavy rains in late May, no major crop damage is anticipated for now, a local grains broker said.