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Australia monthly wheat exports to soar, easing worries over slow sales

Published 10/08/2016, 05:08 pm
Updated 10/08/2016, 05:10 pm
© Reuters.  Australia monthly wheat exports to soar, easing worries over slow sales

* Wheat shipments from Australia to hit 8-mth peak in August

* August wheat exports expected at 1.4 mln T -shipping data

* Grain exporter expects shipments to stay high next month

By Colin Packham

SYDNEY, Aug 10 (Reuters) - Australian wheat exports in August look set to hit an eight-month high as the lowest prices in a decade draw Southeast Asian millers to market, easing worries that the fourth-biggest seller would fail to meet official forecasts for the season.

Exports will hit 1.4 million tonnes in August, port shipping data shows, a rise of nearly 30 percent from July and the largest business month since December 2015.

The jump in Australian exports comes after global benchmark wheat prices Wv1 dropped to their lowest in nearly 10 years over July and August, pressured by ample global supplies. GRA/

"The futures market had come off a fair bit and that encouraged some customers to come in and take advantage," said James Foulsham, wheat trading manager at Cooperative Bulk Handling, Australia's largest grain exporter.

"We have seen a lot of interest for September, too," he said.

The sales are a welcome upturn in business for Australia's wheat sellers, who have struggled amid rising competition and cheap freight rates that have eroded their competitive edge.

Black Sea exporters, for instance, including Ukraine and Russia, have eaten into Australia's share of the market in its largest buyer of the grain, Indonesia.

Australia is expected to sell 17.21 million tonnes of wheat during the 2016/17 season - which began on July 1 - the country's chief commodity forecaster said in June, but sales have been slow until this month.

Australian wheat shippers have also struggled to buy grain to export as some farmers had not wanted to forward sell grain in the first-half of the year, hoping for a price recovery.

But with near perfect growing conditions across Australia, farmers in the largest wheat-producing region of Western Australia have released their supplies, enhancing the nation's competitiveness with Asian grain buyers in Indonesia, South Korea, Japan and other regional buyers, traders said.

"The volumes booked are unusual as August and September are normally pretty flat months for exports out of Australia," said Andrew Woodhouse, grains analyst at Advance Trading Australasia.

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