The Grain Industrial Association of Western Australia cut its wheat yield outlook for the 2016 harvest season by 3.6% or by 390,312 mt from its September forecast to about 10.5 million mt in a report released Tuesday.
This figure is, however, up 13.6% from the 2015 harvest, the report added.
Following the release of the crop report, some Australian wheat sellers hiked their price indications for Australian Premium White by $2-3/mt though others maintained their selling indications unchanged at $200/mt FOB WA while they tried to sell cargoes ahead of the next harvest.
"It's still a big crop [for Australia]. I'm sure some sellers would still sell below $200/mt, so still no change in pricing," an Australian trader said.
Buyers who need large volumes of more than 50,000 mt have already secured their cargoes for December-January almost a month ago. And buyers of small or mid-sized volumes would not accept higher prices, sources added.
With trading slowing over the past weeks and the gap between buy and sell indications at $5-10/mt, sellers were not too keen to sell December-January cargoes aggressively. Farmers too are unwilling to sell cheap ahead of the next harvest.
Meanwhile, Asian buyers reiterated that wheat prices were not likely to rise despite the lower yield forecast by the association as supplies from the Black Sea region, the US and Canada were expected to be ample, which would put pressure on prices.
"Market conditions are different compared to five years ago, and with Ukraine likely to export 16-17 million mt, and around $20/mt cheaper than Australian wheat, it's difficult for buyers to accept higher premiums, crop damage or not," another Australian trader said.
