Australian Crop Update – Week 48, 2025

Australian domestic markets remained steady with most growers still focused on the 2025/2026 harvest. Wheat values in the north were little changed in quotes for domestic and international homes alike however premiums for APH13 protein remain firm on exporter demand and what seems to be limited supply. Bulk handlers continue to keep bids elevated into up country storages to encourage farmer deliveries. Harvest pace continues to pick up in the southern zones.

Harvest activity picked up in Western Australia (WA) and New South Wales (VIC) last week while cool, wet weather continues to slow progress in Victoria (VIC) and South Australia (SA). Queensland (QLD) harvest is mostly finished apart from some stragglers. Harvest is underway in Southern NSW where we are hearing mixed yield results. We are hearing of some better-than-expected yield reports in the south, but more have been disappointed. Grain deliveries have also started in VIC where cool, wet weather continues to slow progress. Harvest deliveries in SA started to climb last week, aided by some drier and warmer weather.
 
The anecdotal early yields support our forecasts that timely in crop rain across VIC, and the late October rain and cool finish will result in average to above average yields for most farmers. Storage operators are saying that farmers are warehousing most deliveries, although this is largely common practice of most farmers now, leaving the marketing decisions until after harvest when they know how much they have got and what quality. Nonetheless, the slow harvest pace in the south and slow farmer selling is keeping the nearby premiums elevated.

There were 800 thousand metric tonnes (KMT) of wheat and 390KMT of barley added to the shipping stem in the past week. This was the largest week of grain additions since February 2024. Weekly canola stem additions were modest at 60KMT. Most of the additions came from WA including 500KMT of wheat and 235KMT of barley. SA wheat and barley weekly stem additions were solid with 155KMT for both wheat and barley. Most of the additions are for December loadings with CBH starting to put on early January loadings in WA. There was 155KMT of wheat added to the NSW stem in the past week.
 
Last week’s strong wheat and barley additions added a much needed spark to the shipping pace. Canola and barley monthly additions are moving at the pace needed to move the volumes we have forecast. However, wheat needs to lift its monthly export volumes to keep pace with a large harvest.
 
Our CFR Matrix analysis suggests Australia is competitive into Asia but not into Africa and the Middle East where Argentinian and Russian originations are cheaper. We expect that Australian wheat monthly shipments can push into the low 2.0 million metric tonne (MMT) range based on Asian competitiveness alone. However, we will struggle to get above 2.5MMT which is needed to shift the forecast 25MMT exports we have in the balance sheet without either improved Chinese imports or a larger slice of the African and Middle East markets.
 
A largely uneventful week unfolded in the shipping markets. The Panamax index closed slightly higher as the week drew to a close. The Supra/Ultramax sector was largely flat across the board. The Pacific held firm throughout the week and the general sentiment is that we are well-balanced leading into the Christmas period. An interesting point to note was there were a few period fixtures concluded in the Pacific for this sector which could point to a confidence in the market in the short term. The Handysize market was quiet but balanced and rates held on all routes.

AUD/USD Currency Update:

The AUD/USD pair traded lower to close out the week based on a stronger US market and a return from the government shutdown. The AUD was down nearly a full cent week on week closing at .6450 at the end of last Friday’s trade. The AUD/USD has been range bound for the past few months with most forecasters still expecting the AUD to strengthen as we move into the new year.
 
The full monthly CPI inflation has been released. The data has shown the underlying inflation pulse remains sticky with annual CPI running around the upper end of the RBA’s 2-3% target band. This result could, in our opinion, reinforce the view that the RBA may not cut interest rates again this cycle. Markets are only discounting ~1/2 a RBA rate reduction by mid-2026. In the near-term, we believe more bursts of data driven AUD volatility are possible. But barring a sharp sustained deterioration in risk sentiment we feel the underlying improvement in US/China trade relations, more favourable yield spreads between Australia and other nations, and/or a pickup in growth momentum in China as stimulus measures gain traction should help the AUD claw back lost ground over coming months and see a move back towards 70 cents.