Australian Grain Market Faces Pressure from Global Supplies and Export Competition

Strategic Insights -

Australian farmers in southern Queensland and New South Wales are preparing for a crowded grain market as harvests loom. Despite a bumper crop outlook, the market is experiencing downward pressure from large domestic and global grain supplies, as well as aggressive selling by farmers and increased demand from the livestock industry. The coming winter crop harvest is expected to bring significant quantities of grain to market, exacerbating the pressure on prices.

Key Takeaways:

  • Australian wheat production for the 2025 season is expected to exceed 33 million tonnes, up from ABARES' current estimate of 32 million tonnes.
  • Barley, canola, and pulse production are also expected to be lifted, with private crop forecasters predicting a combined output increase of 20 million tonnes from last year.
  • The strong livestock industry, with record-high cattle on feed numbers and soaring lamb prices, is driving domestic demand for grain.
  • However, the looming Australian bumper winter crop outlook comes into an already comfortable global grain market, with private and government wheat production estimates in the US, Canada, the EU, and Russia all edging higher in recent weeks.
  • The global grain market is facing a surge in export competition from the US, Canada, and the Black Sea, curbing demand for Australian wheat into key Asian markets.
  • Australian wheat prices in northern NSW and southern QLD have fallen $3-6 in old and new crop positions, with traders more aggressive in feed grain markets.

Statistics:

  • Australian wheat production for 2025: expected to exceed 33 million tonnes (ABARES)
  • Combined output increase of 20 million tonnes from last year (private crop forecasters)
  • Record-high cattle on feed numbers (cattle on feed)
  • Soaring lamb prices (lamb prices)
  • Global wheat production estimates in the US, Canada, the EU, and Russia: all edging higher in recent weeks (private and government estimates)
  • Australian wheat prices (old and new crop positions): fell $3-6 (traders)

Sources:

  • Lloyd George, Ag Scientia
  • ABARES (Australian Bureau of Agricultural and Resource Economics and Sciences)
  • Private crop forecasters (explicitly mentioned in the text, but source not provided)