Northern drought driving prices up


Grains
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Eastern Australian wheat prices are becoming detached from global markets as crop expectations continue to slide.

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Victorian wheat prices strengthened last week as crop conditions through Queensland and NSW continue to deteriorate.

Eastern Australian wheat prices are becoming detached from global markets as crop expectations continue to slide. It’s apparent that more of the Victorian grain harvest must move north to ease supply shortages as drought continues to cut Queensland and NSW crops.

US futures ended last week modestly higher, but the Australian dollar soared to a 2 ½ year high of 81 cents. Regardless, domestic values continued to rally as crop prospects dwindle.

There is no relief in sight to the drought conditions that are gripping NSW and Queensland which has some traders tipping further production losses. Weather forecasts show no sign of rain in the coming weeks.

*Lloyd George, Ag Scientia

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