Australian Crop Update – Week 26, 2025

Nearby Australian domestic wheat prices were solidly higher last week with the 7% short covering rally in CBOT. New crop January wheat was up $10 per metric tonne (/MT) or 3%. Gains were basis driven but sellers were scarce. Barley bids were steady to softer despite the gains in wheat. Sorghum remains quiet outside sold isolated packer and exporter bids. Canola was also firmer with the stronger French futures. Friday seems like a lifetime ago with the US now involved in the Iran conflict. The expectation is that the current geopolitical environment will make markets heavily volatile with risk playing a large part of export executions.

It’s been a quiet week for shipping stem additions. There was 166 thousand metric tonne (KMT) of wheat added to the stem with most of this occurring into Melbourne.
 
As we wait to see the fallout from the astonishing developments over the weekend in the Middle East conflict, the week leading up was a mixed bag for shipping. It was a subdued start to the week with most market players seemingly in a wait and see mode and as result, we found vessel hire rates coming under pressure in most regions with tonnage lists growing due to little fresh demand appearing. However, by midweek, with the uncertainties and oil increasing, there was a shift in charterers mood to try cover orders as early as possible in order to counteract the rising costs (namely bunker prices increasing - up USD 50 pmt in most ports). As activity levels increased, it helped stabilise the market in the Atlantic. In the Pacific there were moderate gains on rates, with some charterers having to pay better than last done levels to secure tonnage. Any cargoes to/from the Persian Gulf are now commanding a premium with many preferring to avoid the area. Australia has been quiet compared to the previous couple weeks given the end of financial year laycans have now been covered.

The Australian dollar is weaker to close last week against the Greenback trading at 0.6423. Over the last week the AUD lost roughly 0.6% versus USD with volatility tied to geopolitical tensions and shifting risk appetite. The AUD peaked around 0.655 driven by improved trade sentiment, particularly ahead of US–China discussions, and a strong Chinese trade surplus. With the US now involved in the conflict with Iran, the expectation is that the AUD will weaken with new support levels at .6305. If it breaks this barrier, we could see the AUD fall again to .6100.