Wheat price in australia?

Question

why dis global wheat prices increase substantially in australia in 2007-2008?what do you predict to happen on the barely market?bread market.

Answer 1

While in recent weeks international wheat prices have lost some ground from their record highs registered in late September, they are still 50 to 65 percent (depending on the type and origin) above last year. Low wheat stocks, compounded by repeated downward revisions of this year’s production forecast in major exporting countries, most notably in Australia, have kept wheat prices at elevated levels. In addition, stronger trade activity in the early months of the season and developments in currency markets, also provided support. The current high prices have been accompanied by extreme volatility (refer to Special Feature on Agricultural Commodity Prices) mostly as a result of low world stocks and stretched export supplies. In October, the United States’ hard wheat (HRW, No. 2, f.o.b.) averaged US$352 per tonne, up US$100 per tonne from its already high level at the start of the season and 60 percent more than last year. Recent weeks witnessed increases also in wheat export prices from other major origins.

While in recent weeks international wheat prices have lost some ground from their record highs registered in late September, they are still 50 to 65 percent (depending on the type and origin) above last year. Low wheat stocks, compounded by repeated downward revisions of this year’s production forecast in major exporting countries, most notably in Australia, have kept wheat prices at elevated levels. In addition, stronger trade activity in the early months of the season and developments in currency markets, also provided support. The current high prices have been accompanied by extreme volatility (refer to Special Feature on Agricultural Commodity Prices) mostly as a result of low world stocks and stretched export supplies. In October, the United States’ hard wheat (HRW, No. 2, f.o.b.) averaged US$352 per tonne, up US$100 per tonne from its already high level at the start of the season and 60 percent more than last year. Recent weeks witnessed increases also in wheat export prices from other major origins.

The wheat futures prices for December delivery on the Chicago Board of Trade (CBOT) hit a record of US$350 per tonne on 28 September, mainly in reaction to a further reduction of the forecast for this year’s Australian crop and the strong pace of export sales from the United States. However, by late October, wheat futures lost some of their earlier gains with prices for March 2008 delivery at the CBOT down to US$299 per tonne, albeit still 60 percent more than in the corresponding period last year. Most prices for nearby delivery remain high but favourable growing conditions in Argentina and generally higher winter plantings, helped also by the suspension of the 10 percent set-aside in the European Union, are likely to improve the supply situation in the coming months and result in lower prices by the middle of next year. In fact, wheat futures for July 2008 delivery are currently quoted at US$248 per tonne, already well below the delivery prices for December 2007 and even March 2008