There has also been a lift from drought in the US spring wheat belt
Australian wheat prices reached the highest price in a year as concerns grew over record dryness in Western Australia.
It added to the lift given to international prices by drought in the US spring wheat belt.
Soil moisture was at a record low in Western Australia, the top wheat-growing state, according to crop analysis group Lanworth which said levels were ‘below average’ in South Australia, New South Wales and Queensland.
And the weather was expected to continue to be dry, with little rainfall and relatively warm temperatures expected in the last week of June.
“The warm and dry pattern will worsen soil moisture deficits,” Lanworth said.
Peter McMeekin, origination manager at merchant Nidera Australia, said ‘virtually all the crop area’ needed rain to germinate and properly establish as it moved into the ‘colder, less vigorous, winter phase of the growing season’.
He added areas which were unsown would remain unsown without ‘significant rain’.
Production concerns were reflected in both old and new crop prices throughout the past few weeks.
New South Wales-based AgVantage said wheat had an ‘exciting week’ last week as prices climbed in the feed wheat markets.
And there could be a ‘further squeeze’ on the high-protein wheat market which was also facing weak US production of spring wheat due to drought.
AgVantage said: “If northern New South Wales does not have a good season, this will remove a large amount of prime protein area and therefore the supply of protein wheat from Australia, magnifying the protein deficit around the world.
However, it warned it was still early days to be ‘too gloomy’ about production.
“While you never write off an Australian crop in June, many eyes will be monitoring this situation to August when many will make their minds on crop potential,” it added.