Wheat prices are set to extend a slump as global stockpiles increase and import demand declines, Australia’s agricultural commodity forecaster said.
The price of hard-red winter wheat at US Gulf ports may average $215 a metric tonne in the year started 1 July, the Australian Bureau of Agricultural & Resource Economics & Sciences said in a report. That compares with $230 a tonne forecast in June and $266 a year earlier, it said. The Canberra-based bureau also raised its outlook for Australian wheat exports 6.5 per cent on expectations domestic production will increase.
Wheat futures dropped 15 per cent this year after successive bumper global harvests boosted supply, helping a United Nations food price index slump in August by the most in almost seven years. World production and stockpiles will reach records in 2015-16, the US Department of Agriculture said on Friday. El Nino-defying rain in Australia's winter has boosted the outlook for production in the fifth-biggest exporter before harvesting starts next month.
“Wheat prices were very strong, but now there’s plentiful supply and stock levels have increased,” Jammie Penm, chief commodity analyst at Abares, said in a phone interview. “That’s put downward pressure on world prices.
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