WHEAT from European Union countries and the Black Sea region pose a big threat to Australian grain exports to the Middle East and Asia in the next 12 months.
Coupled with near-record global wheat stocks, Australian farmers face a grim outlook in the immediate future.
CBH Group wheat trading manager Chris Brown said a lack of storage in the Black Sea region meant countries, including Russia, the Ukraine and Kazakhstan, had to dispose of their wheat straight after harvest.
Mr Brown said cheaper, but inferior quality wheat, would flood Australia's traditional markets.
On top of that, a relatively low euro would result in cheap EU wheat hitting Australian markets.
Last week, the US Department of Agriculture released its first estimate of the 2010-11 global wheat crop.
The USDA has forecast a wheat crop of 672.2 million tonnes - the third largest crop on record but 7.8 million tonnes smaller than the previous harvest.
With estimated consumption this year tipped to be 667.5 million tonnes, world wheat stocks will balloon by another 4.7 million tonnes.
Markets reacted coolly to the forecast.
Mr Brown said there would be at least another year of flat prices.
