Australia, citing improved harvest prospects, lifted its forecast for its wheat exports by more than 1m tonnes, and raised hopes for domestic prices too, besides upgrading hopes for canola shipments.
Abares, the official Australian crop bureau, raised by 1.07m tonnes to 17.53m tonnes its forecast for wheat exports in 2015-16, on a July-to-June basis, representing an increase of nearly 1m tonnes year on year.
The revision reflected the upgrade last week by Abares to 25.28m tonnes its forecast for the forthcoming harvest, “as a result of favourable seasonal conditions in most producing regions during winter, and a favourable outlook for spring rainfall”.
And it came despite acknowledgement by the bureau of the enhanced competition on world export markets stemming from strong harvests in the European Union and Russia, where merchants have introduced hefty price cuts in an effort to secure orders.
Indeed, Abares raised by 8m tonnes to 723m tonnes its forecast for world wheat production in 2015-16, in part down to upgrades to EU and Black Sea crops.
The volume of Australian wheat exports to the Middle East and North Africa “is expected to remain low in 2015–16, resulting from reduced import demand in this region and continued competition from large exportable supplies in the Black Sea region and the EU”, Abares said.
“Australian exports are also expected to face increased competition in some key markets in East Asia from an expected increase in US exports.”
Nonetheless, Abares forecast Indonesia, which accounted for about one-quarter of Australian wheat exports in 2014-15, remaining the largest export market for Australian wheat this season
In fact, the comments follow Australia’s victory on Friday in winning an order of 110,000 tonnes of feed wheat from the Philippines, half priced at $210.90 a tonne on a c&f basis and half at $213.75 a tonne, dependent on delivery date.
Australian supplies, at $231.70 c&f free out, also emerged two weeks ago as the cheapest in an Iraqi feed wheat tender, although Canadian grain was ultimately purchased, at $247.20 a tonne c&f free out, traders said.
Abares also raised its forecast for Australian canola exports, by 143,000 tonnes to 2.32m tonnes, again thanks to improved output prospects, although shipments at this level would still represent a four-year low.
The EU, which accounted for 43% of Australia’s shipments of the rapeseed variant last season, “is expected to remain the largest market for Australian canola in 2015-16”.
Indeed, the estimate for EU rapeseed output was reduced by 400,000 tonnes to 21.3m tonnes.
With the bureau also hacking its estimate for output in Canada, the top exporter, by 1.4m tonnes to 13.3m tonnes, Abares restated expectations for a sharp rise in Australian cash prices, by $51 a tonne to Aus$535 a tonne, despite the recent weakness in world grain and oilseed markets.
However, it raised by Aus$8 a tonne to Aus$312 a tonne its forecast for Australian wheat prices, reflecting the weaker Australian dollar, which boosts the value of the country’s exports in US dollar terms.
The forecast for world wheat prices, as measured by US hard red winter wheat at Gulf of Mexico ports, was cut by $15 to a 10-year low of $215 a tonne, well below the $266 a tonne achieved in 2014-15.
“The world indicator price continues to face downward pressure as a result of limited world import demand and abundant exportable supplies in some countries,” Abares said.
(Source – http://www.blackseagrain.net/novosti/australia-lifts-wheat-canola-export-hopes)