Australia primed for wheat export surge

Australia could be heading for a record wheat crop with strong recent rains setting the country up for a big jump in exports, which would be welcomed by a weather-battered world eager to refill grain bins.
More good rainfall in Australia's eastern and southern growing fields in recent weeks has given growers a much-needed boost after drought devastated last year's crop. Australia's wheat exports are expected to jump 55 percent to 16.2 million tonnes in 2007/08 from a drought-hit 10.4 million the year before, according to a government forecast this week.
"In the space of six weeks it's gone from as bad as it gets to as good as it gets," John Ridley, chair of the NSW Farmers Association grains committee said. "Growers are looking for a big year full stop. Hand in hand with a big year comes the likelihood of large exports," he said. The Australian government's forecast of over 16 million tonnes of wheat exports was "quite possible" given a good crop, Peter McBride, spokesman for AWB Ltd.
This will be the last crop AWB will market as the monopoly exporter, as a result of the fallout from making secret payments to Iraq's regime of Saddam Hussein and breaking UN sanctions. The government decided in March to transfer the monopoly powers from AWB to a new independent grower company by mid-2008.
The big crop could not be timelier for AWB, coinciding with shrinking crops in Ukraine, southern Russia, Southeast Europe and North America. Canadian production in 2007/08 has been forecast by the United States Department of Agriculture to fall to 24.5 million tonnes, from 27.28 million the year before.
The International Grains Council this week said below-normal quality of some US hard red winter wheat raised concerns about supplies. Crop concerns have driven global prices to 11-year highs, creating the rare conjunction of big tonnage's and high prices for Australian wheat producers and for AWB as exporter of the crop.
The US Department of Agriculture this month forecast that world wheat stocks would drop to 30-year lows over the next year. The International Grains Council this week also cut its estimate for world wheat output in the crop year by 7 million tonnes from its forecast a month before to 614 million tonnes.