Australian Wheat A$8 Lower

Benchmark January ASX milling wheat is A$8 lower at A$309/tonne at 7am BST Thursday morning, taking its lead from sharply weaker Chicago wheat futures Wednesday night.

A weaker A$ vs the USD also looks like helping Australian exports this year, with a crop of around 22.5mmt expwected, around 9.5mmt more than 2007.

The weather outlook has also improved, with decent rains forecast for parts of WA to end the week.

The 30-day Southern Oscillation Index (SOI) has lifted sharply since the beginning of June, back up to +16.5 – a pattern that generally suggests better than average rainfall and a move to a La Nina pattern.

In parts of the northern Western Australian wheat belt and most of Queensland, chances are rising for above average rainfall, with the chance of higher than usual rainfall for October through December rising to between 65 and 70pc around Geraldton and through central Queensland.

On the flip side, farmers in far south-western Victoria and south-eastern South Australia have just 35-40pc chance of beating their average, however croppers in these areas are well set up with good subsoil moisture, so a drier finish does not spell disaster.