“This should lead to increased U.S. export sales in the first half of 2013 which will support prices,” Emerald General Manager Risk and Pricing David Johnson said. “The U.S. is looking for the next Egypt wheat tender where they are likely to grab the majority of the business. Europe is also on the radar, tipped to need more than half a million tonnes of U.S. Soft Red Wheat before July 2013.
Johnson said Argentina’s rain-plagued wheat harvest has already sent extra demand to Australia’s doorstep.
“There are reports Argentina’s wheat crop is now down to 9.5 million tonnes, with exports of only 4.5 million tonnes,” he said. “As a result, we’re seeing markets in the east coast of Africa turning to Australia to meet demand.”
Looking at soybeans, Johnson said the U.S. has already made 83% of its target export sales in 14 weeks of its export program.
“This is very supportive for protein vales and for canola. We could be heading toward a new year ‘pop’ for soybeans,” Johnson said.
Johnson said the biggest surprise for analysts was the size of China’s 2013 corn crop.
“The Chinese have a record corn crop of 208 million tonnes — up from 193 million last year and 177 million previous to that,” he said. “The increase will help satisfy their stock-feeding needs. Keep in mind this could reduce demand for imports of lower-quality Australian wheat for stock feed markets.”
Johnson said market volatility meant growers were continually adjusting their marketing.