WORLD wheat consumers are desperately seeking high protein wheat and have driven up prices for high protein classifications to close to decade highs.
Tobin Gorey, Commonwealth Bank commodity analyst, reported that the Minneapolis wheat futures contract had hit $US10 a bushel for the first time in nearly a decade this week.
In local values, H2 wheat delivered Kwinana in Western Australia is around $385 a tonne, while east coast port prices are at around $360/t and Australian Stock Exchange January futures are at $338/t.
Mr Gorey said the world was crying out for high protein wheat, with current dry planting conditions in both the US red winter wheat growing zones and Russia and Ukraine not helping matters.
He said it had pushed Kansas City futures, another primarily hard wheat category to three year high premiums over the benchmark Chicago wheat contract.
Nick Crundall, Market Check head of strategy, said while it was not expected to be a high protein season domestically, the quality of wheat being produced would be highly sought after.
"The anecdotal reports from Queensland and northern NSW is that some of the guys that often produce Australia Prime Hard are this year growing AH or H2 quality wheat, which is slightly lower in protein, but this sample size is far from definitive," Mr Crundall said.
He said regardless if protein was slightly down the global market was still eagerly anticipating the Australian crop coming online and would snap up medium, as well as high, protein grades.
"You won't see the full advantages of those massive spreads if you're growing H2 but there will still be good opportunities there," Mr Crundall said.
He said exporters would be looking at making the most out of what hard wheat came in by blending and utilising old crop reserves but said most had anticipated a season with medium protein levels given growing season conditions.
Mr Crundall said it would be interesting to see growers' marketing strategies this year.
"At face value you would think there would be a lot sold straight off the header given prices are historically high but there will be other considerations," he said.
"You would expect the record canola price will mean farmers satisfy their cash flow needs by selling that straight away and from there they may have a look at what is happening, especially given Australian wheat is cheap on the world stage.
"There may also be the pleasant problem of tax implications with selling that means some may delay selling until the new financial year."
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