Australian wheat prices drop below Black Sea in Asia for 1st time in 4 years
* Australian wheat quoted at $275/T in Asia vs Black Sea at $285/T
* Price likely to drop further as near record harvest underway
By Naveen Thukral
SINGAPORE, Nov 6 (Reuters) - Prices of Australian wheat offered in Asia slid this week below Black Sea values for the first time in at least four years, with the country forecast to harvest a near-record crop, two trade sources said.
For January shipment, Australia Premium White (APW) wheat is being quoted at $275 a tonne, including cost and freight (C&F), to Southeast Asia, compared with a similar quality of Black Sea wheat at $285 a tonne.
"Price is likely to drop further as the crop looks really good," said Ole Houe, director of advisory services at agriculture brokerage IKON Commodities in Sydney. "Growers are happy sellers at today's numbers and yields are massive."
IKON Commodities is estimating Australia's 2020/21 wheat crop at 32 million tonnes.
"The latest upward revision comes on the back of reports of wheat coming off with record yields in northern New South Wales (NSW) as well as widespread rainfall across eastern Australia that is expected to give an additional last-minute boost for the southern part of the country," the brokerage said in a report.
"Production in NSW is now estimated at 13.2 million tonnes, an all-time high."
This compared with the Australian Bureau of Agricultural and Resource Economics and Sciences forecasting the country's wheat production for the year ending June 30, 2021 at 28.91 million tonnes, up from its June estimate of 26.67 million tonnes.
"For the first quarter, Asian wheat buyers are going to shift to Australia," said one Singapore-based trader. "Prices are cheaper and quality is good."
Australia has suffered drought for the last three years, curbing production of wheat and lifting prices. (Reporting by Naveen Thukral; editing by Uttaresh.V)
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