Australia's wheat exports are expected to recover following a 44 percent dip in November blamed on late plantings, excessive rain in the east and dry weather in Western Australia, traders said on Monday. "There's still strong demand for milling wheat so we have to meet out commitments to that," said Chris Kochanski, a senior grain trader at Emerald Group.
"We're still finding there's still some (milling wheat) so we have to match up our commitments to that," said Kochanski. Australia is one of the fourth largest wheat exporters, serving Asian and Middle East market. Kochanski said there was strong demand for shrinking supplies of milling wheat globally which was supporting prices.
"There's probably more being delivered at the lower end of the range," Kochanski said. "We've still got shipping commitments out of the east and South Australia but because of the situation in the West, overall there will be probably less overall exports this year. Australian export trade estimates for the October-September marketing year are around 14 million tonnes market.
"Globally, most people are talking about feed wheat being exported out of Australia but we think about 12 million tonnes of milling wheat could be exported." Kochanski said. "What we will see is a lot more wheat exported to Egypt," he said, adding there was going to be a lot of feed wheat left over in Australia this year. CBH Group wheat manager Tom Puddy said global demand for milling wheat remained strong but quality was less of an issue. "We've had a better crop in Western Australia than had been expected at about 4.4 million tonnes, compared with earlier estimates of less than 3 million," Puddy said.
Last season Western Australia, usually the country's top grain exporting state, produced an 8.2 million tonnes crop. Puddy expects about 10 million tonnes across Australia to be downgraded to low quality milling or feed wheat in 2010/11 out of a 24 million harvest, that is now in the final stage.