Three months into the crop season, and there’s still plenty of wheat in the market, especially in Australia’s export-hungry New South Wales.
The market is growing at a healthy pace, with the Australian Wheat Board predicting a further 5.3m tonnes of wheat exported this year, and the NSW Wheat Board saying that will be enough for the state to produce about 4.8m tonnes in the whole of 2017.
The wheat market has been growing at 5.1 per cent a year in recent years.
The WA wheat harvest will also be big.
The WA wheat farmers association says the crop is expected to yield 5.5 million tonnes, and that the WA wheat market will be worth about $US15 billion.
The biggest wheat markets in the world are Australia, China and the US, and they have all been hit by a severe drought.
In Australia, the wheat is a key export commodity, because the state’s wheat growers can’t compete with export-oriented farms in China, for example.
But wheat has been hit harder than wheat by the drought, with yields in the US dropping by more than 90 per cent in some regions.
So how will the drought affect the wheat market?
The WA Wheat Board says it expects wheat to be at its lowest level in the past 25 years.
But it’s unclear what impact this will have on prices.
As a result, the WA Wheat Council has warned that prices could fall to less than $US50 per bushel in a couple of weeks.