Australian Wheat and Barley Prices Firm Amid Logistics Concerns

Despite dry conditions and frost in southern Australia, wheat and barley prices have firmed up by at least $5 per tonne due to concerns over logistics rather than overall supply. Local appetite is high for wheat for export, with consumers focusing on getting comfortable coverage into new-crop positions.

According to Stewart Grain trader Robert Quinn, the market has firmed in the past week, with freight rates lifted by dearer diesel and dry conditions being the main contributing factors. 'Crops here are going backwards; they needed a drink and they didn’t get it,' Mr. Quinn said.

The north's harvest is expected to be short and sharp, with low testweights potentially resulting from the dry finish. Expensive diesel has made long hauls to southern Queensland's Downs and far northern New South Wales unlikely during harvest, but Mr. Quinn said growers in adjacent areas may benefit from the northern premium.

Sunrise Commodities managing director Scott Merson said values for wheat and barley have firmed this week on thin grower selling and domestic and offshore factors. 'There's enough going on offshore to make the market look like it will get stronger, and the increase in diesel and freight from the south only feeds into stronger values up here,' Mr. Merson said.