(Reuters) Wheat stocks held by bulk handlers in Australia fell eight per cent for the second straight month in March indicating strong exports despite the local dollar rising above $US1 during the month, making exports less competitive.
Australia’s bulk storage of wheat grain at the end of March was estimated at 18.7 million tonnes, a drop of around 1.6 million tonnes from February, the Australian Bureau of Statistics (ABS) said. Stocks also fell eight per cent in February from March.
Australian Crop Forecasters (ACF) analyst Gavin Warburton said forward sales programs, utilising currency hedging, had helped maintain the pace of exports.
“Exports are significantly higher than this time last year … if the amount of grain indicated on the shipment bookings is right then it is going to close to a record export year,” said Gavin Warburton, an analyst at Australian Crop Forecasters (ACF).
But he said exports were likely to have tapered off in April to around an estimated 1.4 million tonnes, including container exports from 1.6 million tonnes in March but still up about a third from April 2010.
“If the export pace is to be maintained it would indicate stock levels at the start of the 2011/12 marketing year similar to last year at around 5.8 million tonnes,” said Warburton.
“It would be an enormous achievement to do that but it obviously depends on what happens overseas even though the forward sales remain healthy at this stage,” he said.
Warburton said exports for the 2010/11 marketing year ending Sept. 30 could exceed 17 million tonnes, up about 15 per cent from the previous year.
The ABS said bulk stocks were up around 33 per cent from a year earlier thanks to a bumper harvest of around 25.5 million tonnes although quality was lower due to a wet harvest.
The country is one of the world’s leading exports but its 2010/11 harvest, completed earlier in the year, produced more feed quality wheat than usual as crops were soaked by above average rain across the east coast as harvesting got underway.
The ABS said milling grade accounted for 10.3 million tonnes or 55 per cent and feed grade 8.5 million tonnes or 45 per cent of wheat stored by bulk handlers at the end of March.
A year earlier 86 per cent of bulk wheat stored was milling grade.
Despite the lower quality, Australian exporters have been able to lock in sales even though competition has toughened as countries such as Pakistan are selling higher quality wheat at lower prices than Australian feed wheat.
Posted by Haylie Shipp