THE volatile Australian dollar has created a “tremendous opportunity” for wheat growers across the country as farmers seek to take advantage of more competitive prices.
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As the dollar dipped from US93 cents in early May to US81.2c on Monday, wheat growers across NSW became more attractive to overseas buyers who are looking for good quality grain.
But the opening up of opportunities in the export market has been tempered slightly, as the Chicago Board of Trade December contract dropped from US550c a bushel to US483c/bu in the past four weeks.
AWB external communications manager, Ian Desborough, said the drop in the Australian dollar was a blessing for wheat growers.
“It’s been very good for the wheat sector,” Mr Desborough said.
“The effect of the Australian dollar going down like it has makes us more competitive.
“It’s been particularly beneficial, as many farmers in south-east Australia who stored a lot of grain and didn’t sell it can now do so at better prices.
“It’s created a tremendous opportunity to sell.”
Mr Desborough said until a few weeks ago, the high dollar rate was punishing growers who had just come out of years of drought.
“Farmers have played their get-out-of-jail-free card with this change,” he said.
“We had a good-sized Australian crop last year, but the underlying situation is that there’s a very large amount of wheat in the world, with a very large crop to be harvested in the northern hemisphere in the coming months.
“It is still a tough market.”
Grain growers need to keep a good handle on the global situation if they are to ride out the volatility in the Australian dollar, said Agracom managing director, Joe Hallman, Quirindi.
“The recent drop in the dollar has added $10/t to $15/t to cash prices in Australia,” he said.
“It appears to be extremely volatile at the moment and it’s making the export market difficult to predict.
“Growers need to be mindful of the global grain situation and act on target prices.”
Mr Hallman said recent rain across much of NSW and Queensland had helped increase confidence among growers, and this could flow on to the overall market situation.
“Southern NSW in particular hasn’t had much luck in the past few years so we are hopeful for a good winter in that region.”
And the increase in optimism has hit the north of the State, too.
Australian Grain Accumulation field merchant, Anna Watson, Tamworth, said good rain in the past two weeks had lifted confidence in growers for the coming year.
“It’s looking fantastic around here. The region got between 20 and 35 millimetres (of rain) – just what was needed,” she said.
“Growers are eternal optimists.”
Mrs Watson said the drop in the value of the dollar had not really impacted on the daily routines of growers in the region.
“It’s given a little bit of a reprieve to growers,” she said.
“Despite the dollar dropping, futures markets have also dropped in line, so things are more stable than they may normally be.”
