Australia’s 2008-09 wheat crop will be down from earlier forecasts because of the dry May, but other grain crops still look like being larger than the last two drought hit crops.
In an update of its crop report yesterday, ABARE said the wheat harvest could be 8.8% lower because of the impact on yields of the record dry in May.
ABARE said the harvest may be 23.7 million tonnes, compared with its March estimate of almost 26 million tonnes and last year’s drought-reduced crop of 13.02 million tonnes.
The bureau’s revised forecast compares with a forecast Monday of 24.3 million tonnes from the National Australia Bank and a 20 million to 24 million tonne range prediction last month by Rabobank Group.
The news helped world wheat prices rise, although the main influence was the damage being caused to US grain crops by the Midwestern floods.
The Chicago Board of Trade July contract price jumped 30 US cents to close at $US9.16.25.
Both forecasts were based on the impact of the dry weather. According to the US Department of Agriculture the latest forecast in its world crop report last week was for a 24 million tonne crop.
Analysts say that hopes for a bigger crop in Australia and a couple of other producers (including the US before the current very wet weather in some parts of the Midwest) had helped push world wheat prices down from the record highs reached in February of $US13.495 a bushell.
Wheat was trading around $US8.7325 a bushell in after hours trading in Asia yesterday. It finished up on the Chicago Board of Trade.
ABARE said that above-average winter rain is forecast in Queensland and parts of NSW, with below-average falls expected in some of Western Australia, the main wheat-growing state.
The USDA says the US will be the world’s largest wheat exporter, followed by Canada and Australia, which will move up from sixth last year after the second year of drought. But that crop was still 50% above the 9.5 million tonnes in the 2006-07 year.
ABARE says that Australia’s wheat exports are expected to jump to 16.3 million tonnes in 2008-09 from just 6.6 million tonnes the year before.
This will be welcomed by markets across Asia and the Middle East, which rely on Australian wheat.
That increase in exports will be the highest since the 17.9 million tonnes shipped in the record crop year of 2003-04.
ABARE also boosted its forecast for the 2008-09 summer rice crop to 253,000 tonnes from a miniscule 19,000 tonnes in 2007-08 when drought affected allocations of irrigation water, especially in NSW. This compares with five-year average rice production of 163,000 tonnes.
This is a summary of ABARE’s report yesterday:
With the exception of Western Australia, the majority of Australia’s winter cropping regions received below average autumn rainfall.
The lack of autumn rainfall meant many winter crops were dry sown or not sown during the optimal planting window as growers waited for rain. Widespread rainfall in early June in the eastern states provided the moisture for growers to complete intended cropping programs.
The Australian Bureau of Meteorology in its latest seasonal rainfall outlook (27 May 2008) for the June to August period indicates an increase in the odds toward above average rainfall across most of Queensland and northern New South Wales, with the chance of exceeding average rainfall being between 60 to 70 per cent.
In contrast, the Bureau is forecasting below average rainfall for south-west Western Australia, which has only a 30 to 40 per cent chance of exceeding average rainfall.
However, the Bureau has advised that because of technical issues, its current confidence in the outlook assessment for Western Australia is low. Across southern New South Wales, Victoria and South Australia, the chance of accumulating at least average rainfall in the June to August period is close to 50 per cent.
If this rainfall outlook is realised, it is likely to have a negative impact on yields in Western Australia. Conversely the impact on yields in Queensland and northern New South Wales is likely to be positive.
The total area sown to winter crops in Australia is forecast to increase by 9 per cent to 22.3 million hectares in 2008-09.
Total winter crop production in 2008-09 is forecast to reach 37.1 million tonnes, a 65 per cent increase on the drought affected 2007-08 season.
Of the major winter crops, the area sown to wheat is forecast to rise by 13 per cent to a record 14 million hectares, reflecting relatively high world wheat prices and the attractiveness of cropping to improve short-term cash flow. Assuming an improvement in yields from the 2007-08 season, total wheat production is forecast to reach around 23.7 million tonnes in 2008-09, an increase of 82 per cent.
The area sown to barley is forecast to increase only marginally from the previous season, to around 4.5 million hectares in 2008-09.
The canola area sown is forecast to increase by around 16 per cent to 1.2 million hectares, reflecting a significant increase in Western Australia. Barley and canola production are forecast to increase to 7.9 million tonnes and 1.7 million tonnes, respectively.
Total summer crop production in 2007-08 is estimated to have increased by 59 per cent to around 3.5 million tonnes. Favourable sowing conditions and timely rainfall throughout the season has resulted in an estimated grain sorghum crop of around 2.7 million tonnes, double the previous year’s harvest.
However, a lack of irrigation water severely constrained the area planted to both rice and cotton in 2007-08. Rice production is estimated to have declined by around 88 per cent, to just 19 000 tonnes in 2007-08. Cottonsee
