The Australian Bureau of Agricultural and Resource Economics and Sciences, or ABARES, has raised its forecast for Australia’s wheat exports for the marketing year 2021-22 (October-September) to 24.5 million metric tonnes, up from 23 million metric tonnes in September.
ABARES said in its quarterly report released Dec. 7 that Australian wheat exports are now expected to be approximately 3% higher than last year.
Due to restricting wheat supplies from Canada, the United States, and Russia, ABARES expects exports to rise as the season progresses.
“Australian wheat production is expected to be the highest on record,” the agency stated, adding that “Australian exports are anticipated to be competitively priced to meet world demand.”
In its crop report released on Nov. 30, ABARES increased its forecast for Australian wheat output to a record high of 34.4 million mt, up from 32.6 million mt. On a year-over-year basis, production is expected to increase by over 3%.
Because of the expected rise in exports, the agency has raised its forecast for Australia’s ending stocks to 4.7 million mt from 4.6 million mt before. In MY2021-22, ending stocks of Australian wheat are expected to be almost 63 percent larger than the previous year.
Domestic consumption of the basic food grain fell by almost 2% year on year to 8.1 million mt, according to the data.
Along with an increase in exports, the value of exports is expected to rise by more than 11% year on year to A$ 9.3 billion ($6.6 billion).
Aside from the expected increase in export value, average domestic prices are expected to rise to A$ 400/mt, up from A$370/mt in September.
APW wheat export prices have risen by more than 9% in the last month, reaching a new high of $372.5/mt on December 3.
On December 7, FOB prices for APW wheat were $372.50/mt, up from $341/mt a month ago, according to S&P Global Platts.
Due to dwindling supply of milling grade wheat from the United States and Canada, ABARES anticipates Australian Premium White wheat prices to rise.
Aside from that, recent rains in portions of Australia have resulted in a possible decline in wheat protein content and a further tightness of APW wheat supply.
The price of APW wheat exports has increased by more than 9% in the last month. On Sept. 14, S&P Global Platts estimated APW wheat export FOB prices at $323/mt, up from $247.25/mt a year ago.