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ABARES scales up Australia's 2021-22 wheat export view, FOB prices peak


2021-22 wheat exports seen at 24.5 mil mt, 3% higher on year

Wheat ending stocks seen at 4.7 mil mt in 2021-22

APW Wheat export prices reach record high of $372.50/mt

The Australian Bureau of Agricultural and Resource Economics and Sciences, or ABARES, increased its estimate for Australia's wheat exports for the marketing year 2021-22 (October-September) to 24.5 million mt from 23 million mt pegged in September.

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Australian wheat exports are now seen nearly 3% higher on the year, ABARES said in its quarterly report released Dec. 7.

ABARES expects exports to increase due to tightening wheat supplies from Canada, US, and Russia amid prolonged poor seasonal conditions.

"Australian wheat production is forecast to be the biggest on record, and Australian exports are likely to be competitively priced to meet world demand," the agency said.

ABARES raised its projection for Australian wheat output to a record high of 34.4 million mt, up from 32.6 million mt, in its crop report released on Nov. 30. The production is seen over 3% higher on the year.

With the likely increase in exports, the agency has increased its estimate for Australia's ending stocks to 4.7 million mt from 4.6 million mt seen in September. The ending stocks for Australian wheat is estimated over 63% higher on the year in MY2021-22.

The domestic consumption of the staple food grain was seen over 2% lower on the year at 8.1 million mt, the report said.

Export prices rising

Along with the increase in exports, the value of exports is seen increasing over 11% on the year to A$9.3 billion ($6.6 billion).

Along with the likely increase in export value, average domestic prices were also seen rising to A$400/mt from the A$370/mt estimated in September.

The exports prices of APW wheat have gained over 9% the last month to reach a record high of $372.5/mt on Dec. 3.

According to S&P Global Platts, the FOB prices of APW wheat were at $372.50/mt on Dec. 7, compared with $341/mt a month ago.

ABARES expects the prices of Australian Premium White wheat to increase on the back of tightening supplies of milling grade wheat from US and Canada.

Apart from that recent showers in parts of Australia have led to a possibility of a declining protein content in wheat and further tightening supplies of APW wheat.

"With extremely tight global supply of high-protein wheat, any significant downgrading of the quality profile of the Australian harvest due to wet weather is likely to push world prices for high-protein wheat even higher," the report added.

The exports prices of APW wheat have gained over 9% the last month. S&P Global Platts assessed the export FOB prices of APW wheat at $323/mt on Sept. 14, compared with $247.25/mt a year ago.