Price, yield rises help sprout harvest of hope

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WA wheat is beating gains in global prices.
Camera IconWA wheat is beating gains in global prices. Credit: Danella Bevis

WA grain growers remain in a dual sweet spot for prices and yields, with Australian Hard 2 wheat bids this week reaching prices not seen in several years.

Bids for AH2 departing CBH’s Kwinana Grain Terminal peaked at $430 a tonne this week, driven by demand for high-protein wheat to fulfil contracts for bread, flat breads and steamed products.

It’s the highest price for AH2 wheat since 2010 and 2007, when drought-like conditions sent wheat prices climbing.

WA wheat is beating gains in global prices, with a 20 per cent price surge last month partially driven by dry conditions in Europe and the Black Sea.

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CBH marketing and trading general manager Jason Craig said the $10 premium for AH2 wheat, compared to APW1, had quadrupled, with buyers now paying premiums of up to $40 a tonne.

“This has seen AH above $400 a tonne free in store,” he said. “APW1 prices continued to remain firm at levels between $356-370 per tonne free in store (this week).”

Mecardo commodity analyst Andrew Whitelaw said AH2 prices of that nature had not been seen since at least 2010.

“It is a historically high number,” he said.

“These are good prices but they are also premium prices trading above international values ... that is a good news story.” CBH estimates about 40 per cent of WA’s wheat crop is low in protein this season, which experts attributed to conservative nitrogen application across the State.

Grain Growers WA regional coordinator Alan Meldrum said WA growers had scaled back on nitrogen application early in the season because of dry conditions.

“We had a conundrum around not having the confidence to put enough nitrogen on the crop when it can make a difference,” he said.

“It is hard not knowing what spring rainfall is going to do. If growers had a decent September rainfall, we would have got more yield which would have meant less protein because we weren’t supplying any further nutrients.”

WA is expected to ship more than two million tonnes of grain to Australia’s east coast this season after a prolonged dry spell caused contract washouts and feed deficits.

However, Mr Craig said east coast interest had remained flat this week as users focused on local harvest in their respective regions.

WA’s barley market continued to grow this week, with more than four million tonnes in the bins.

CBH reports more than 35 per cent of receivals so far have met malt specifications.

Mr Craig said prices remained above $300 free in store with feed barley trading at $310 to $315 a tonne and malt barley fetching a $10 a tonne premium.

Canola prices have remained stable this harvest, at about $575 - $580 a tonne, which CBH attributed to “relatively good European demand” and some interest from the east coast.

As WA’s harvest moves into the final few weeks, traders are strongly focused on executing business.

Mr Craig said more than two million tonnes of grain was expected to be shipped from WA between now and the middle of January.

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