AS of the end of last week, 2020/21 wheat prices in the Kwinana Zone have picked up $25 a tonne since the start of the month.
During this time prices into key export markets have also increased.
Notwithstanding other political tensions currently embroiling Australian agriculture, if the market can hold onto most of this support through the harvest period the impact on farmgate returns will be welcomed.
Wheat tender activity has picked up in September and global wheat prices are trending higher.
The rising world wheat price has come as a surprise to some, as USDA estimates have world wheat production reaching a new record high in 2020/21 of 770.50 million tonnes.
The COVID-19 pandemic has countries re-evaluating their food security and has prompted strong demand for milling wheat.
Black Sea wheat has filled a lot of this demand, having a greater exportable surplus than the European Union, which has corresponded to a rise in the Black Sea wheat price.
Based on tender results analysed by Profarmer, the indicative world price of milling wheat has risen around $US15/t (say A$20/t) since the start of September.
Egypt's General Authority for Supply Commodities (GASC) has booked just under 700,000t of wheat in September.
Reported on September 3, GASC booked a milling wheat tender at $US241/t CFR, followed by the September 15 tender at $US249/t CFR and their most recent September 21 tender at an average price of $US256/t CFR.
Egypt's wheat tenders continue to be filled by Russian wheat as it is cheaper than other origins and is in exportable surplus.
While Russia continues to dominate Egyptian wheat tenders, other origins like Poland, Argentina, United States, Canada, and Australia have also secured export business.
Australian origin secured wheat volumes to the Philippines (110,000mt feed at $US255/t CFR), Japan (22,685mt ASW) and Thailand (120,000mt feed at $US258/t CFR).
This indicates Australian wheat is competitive on the global wheat trade and has provided support to local prices, especially in export orientated port zones.
Demand for feed wheat in Asia has risen in recent months, particularly with China's feed demand increasing as they manage the rebuilding of their pig herd after it was decimated by African swine fever.
There has also been production loss in China due to the recent typhoons, however China has downplayed this, announcing damages were not as severe as initially thought.
China is purchasing large volumes of US corn and soybeans to satisfy its feed demands.
Accordingly, feed wheat prices have seen a gradual rise in recent months.
Thailand feed wheat tender prices are a good indication of this, having increased over $US40/t ($A57/t) since June.
The Thailand tender reported on June 29 was booked at $US217/t CFR, the August 18 tender at $US232/t CFR and the September 21 tender at $US258/t CFR.
South Korea and the Philippines have both seen similar tender price rises over this time.
