Australia wheat stocks seen thinning as early as July

Thu Jan 10, 2013 2:10am EST

* Analysts say wheat stocks could run short as early as mid-July

* Asian consumers may have to source wheat from other exporters

* Would likely have to pay higher shipping costs

* But impact on global prices would be limited as other supplies increase

By Colin Packham

SYDNEY, Jan 10 (Reuters) - Australian wheat stocks will likely run low as early as mid-July due to strong exports from the world's No. 2 largest seller, traders and analysts said, possibly pushing some customers in Asia to look elsewhere for the grain.

The pace of Australian wheat exports has been strong with sellers keen to front-load sales before harvests in the United States and Canada provide competition.

"I would say that we will have a higher proportion of exports in the January to May period than normal," said Brian Dalitz, group general manager for trading and marketing at Emerald Trading Group.

Stocks will also be hurt as the country in December trimmed its wheat production forecast for the current marketing year by 2.3 percent from its previous estimate to 22.03 million tonnes.

A shortage of supply from Australia may force nations such as Indonesia and South Korea, typically the largest buyers of Australian wheat, to source the grain from elsewhere, incurring higher freight costs.

Though market participants played down the potential affect on global prices, as they expect international supply to pick up.

"We may get real pressure on Australia's ability to keep exporting late into the marketing year, but the impact on the international market may be limited because of available supplies coming in elsewhere, though the Asian markets may have to pay a little more to cover the additional freight," said Malcolm Bartholomaeus, senior commodities analyst at Profarmer.

Global wheat stocks remain tight following droughts in Black Sea region, though concerns over significant shortfalls in production have eased slightly in recent months.

Chicago Board of Trade wheat futures have dropped nearly 14 percent since the end of August amid expectations of bumper U.S. winter production. (Editing by Joseph Radford)

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