"Increased competition" is to prevent Australia's wheat exports
matching the ongoing harvest in setting a record, officials said, although
proving more downbeat on domestic price prospects for barley and canola.
Abares, the official Australian commodities bureau, hiked by
4.1m tonnes to 22.4m tonnes its forecast for the country's wheat exports in
2016-17, on a July-to-June basis, citing the boost to supplies from a record
The bureau last week lifted by nearly 4.6m tonnes, to an
all-time high 32.6m tonnes, its forecast for Australia's wheat production this
season, thanks to "favourable seasonal conditions" which have "supported above-average
to exceptional yields in much of the Australian cropping region".
However, the export forecast, while representing a jump of
42% year on year, remains below the record of 24.66m tonnes set in 2011-12.
It is also below a forecast of 23.0m tonnes revealed by the
US Department of Agriculture on Friday, in its flagship monthly Wasde briefing
on world crop supply and demand.
Abares said that "volume exported in 2016–17 is less likely
to reach that [2011-12] record because of increased competition due to global
availability of large exportable supplies".
While most major wheat exporters "are forecast to have ample
supplies available for export… total world imports are expected to remain largely
The bureau also upgraded its forecasts for exports from the
likes of Kazakhstan, Canada and Ukraine, and said that Russian shipments "are
expected to gain momentum" after a "slower-than-expected start", offsetting
reduced expectations for EU shipments.
Meanwhile, for imports, Abares forecast that in sub-Saharan
Africa purchases will "fall in 2016–17 and by as much as 30% in South Africa
and Ethiopia," after record imports last
year thanks to poor domestic harvests.
This will offset increased import expectations by the likes
of India, which Abares forecast would buy-in some 3m tonnes – an estimate made
before the country last week ditched a 10% import tariff in the face of
elevated domestic prices following a disappointing harvest.
Milling vs feed
Among Australia's own major wheat customers, demand
prospects looked "mixed", Abares said, citing in particular a preference for
"Indonesia is expected to increase wheat imports for human
consumption but to reduce overall wheat imports because of decreased feed wheat
"China and India are expected to increase milling wheat
imports to supplement poor quality domestic harvests."
Although Abares stopped short of releasing an estimate for Australian
wheat stocks, its estimates imply a large increase in inventories, as forecast
by the US Department of Agriculture.
Australia's exportable wheat supplies "are massive because
of a record crop", the USDA said on Friday.
"Despite higher exports and domestic consumption, stocks
will continue to grow, augmenting the already burdensome global stocks and
Nonetheless, Abares itself stood by expectations of Australian
wheat prices, as measured by pool returns of premium white wheat, averaging Aus$260
a tonne this season, albeit a figure down 14.2% year on year.
Its estimate for world wheat prices, as measured by hard red
winter wheat values at US Gulf ports, was nudged $2 higher to $166 a tonne.
However, Abares did downgrade domestic price prospects for barley,
now seen averaging Aus$179 a tonne in Geelong for feed, weighed by a harvest
now seen soaring 24% year on year to a record 10.6m tonnes.
And for canola, the bureau cut its forecast for Melbourne
prices by Aus$22 a tonne to Aus$533 a tonne, ditching expectations of a rise in
values this season.