Boom times for Australian wheat

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Australia's wheat exports jumped 52 percent in July from a year earlier as buyers sought to replace dwindling supplies from the drought-stricken Black Sea region, according to government data released on Tuesday.

Wheat exports from Australia, the world's fourth largest shipper of the grain, rose to 1.591 million tonnes in July from 1.049 million tonnes exported in July last year, the Australian Bureau of Statistics said.

In June, wheat exports totalled 1.138 million tonnes, revised down from 1.165 million tonnes.

In the first seven months of the October-to-September marketing year, exports fell to 11.888 million tonnes from 12.327 million tonnes a year ago as a strong Australian dollar and competition from cheap Black Sea supplies earlier in the year held back sales.

Traders have reported a pickup in interest in acquiring grain from Australia's 2009/10 harvest that yielded 21.7 million tonnes. The new harvest starts next month and is forecast to yield around 22.2 million tonnes.

The ABS said wheat committed for export in July rose 67 percent from a year earlier to 3.639 million tonnes, but was down from 3.871 million tonnes in June, reflecting tightening old crop supplies.

Wheat stored by bulk grain handlers at the end of July totalled 7.90 million tonnes, down from 9.88 million tonnes at the end of June, the ABS said.

It said growers held an additional 568,000 tonnes in storage, down from 756,000 tonnes in June.

A Melbourne-based trader said Australian wheat stocks at the end of the marketing year on Sept. 30 could be as low as 4.2 million tonnes as traders sourced wheat from Australia to replace cargoes sourced from the Black Sea region.

Earlier in the year, traders were suggesting Australia could be saddled with wheat stocks left over from the 2009/10 harvest of more than 6 million tonnes compared with 3.74 million tonnes a year earlier.

But the drought in Russia has turned the global wheat market on its head with the country, last year the world's third largest wheat exporter, banning grain exports last month.

How long the Russian export ban will last is not certain as Russian President Dmitry Medvedev signalled on Monday it may be lifted earlier than Dec. 31 this year. However, Prime Minister Vladimir Putin had said last week the ban may be extended to late 2011.

Commonwealth Bank of Australia, in an August 27 report, trimmed its estimate of bulk wheat stocks at the end of the Australian wheat marketing year on Sept. 30 to 4.8 million tonnes from a previous estimate of 5.2 million tonnes.

"This reflects improved Australian export opportunities because of the Black Sea drought and the Russian export ban," the bank's agricultural commodities strategist Luke Mathews said in the report.

- Reuters