Australia’s resources luck continues with the solid rains of the past month or so across much of our grain growing areas boosting the probable size of the 2010-11 wheat harvest to the highest level in five years, just as world wheat prices continue to be boosted by uncertainty about supplies from Russia.
As well, Australia should be able to take advantage of 15 year price highs for cotton after a sharp rise in the size of the 2011-11 crop, while the rice, canola and barley harvests will also be higher than in the last couple of years
The 16% lift in the wheat harvest (compared with last year) has come as a result of good rains in eastern states and South Australia.
But Western Australia continues to have a dry time of it after similar conditions through the autumn and early winter and that has seen estimates for that state’s crop cut.
According to the latest crop update from Australian Bureau of Agricultural and Resource Economics-Bureau of Rural Sciences Australia is looking at a 16% jump in the estimated size of the harvest to 25.1 million tonnes, the highest since 25.15 million tonnes was taken off in 2005-06.
Australian wheat production reached its highest level in 2003-04 at 26.1 million tonnes.
It added that exports could reach nearly 18.4 million tonnes, the second highest on record after 1996-97’s 19.2million tonnes.
Although much of the heat in world wheat prices has cooled in recent weeks, they still remain 8% higher than they were earlier at the start of the year after a 40% surge midyear.
The good news from Australia is likely to put downward pressure on global prices, but the ban on Russian exports until the new year will help sell the bigger Australian crop and help keep prices around current levels or higher.
ABARE-BRS said the new forecast of 25.1 million tonnes, compares with the June estimate of 22.1 million and production last year of 21.7 million tonnes.
“New South Wales has the prospect of achieving some of the highest yields in 10 years and, combined with a high area cropped, is expected to drive the increase in national production,” Paul Morris, deputy executive director at the bureau, said in the report.
Wheat futures in Chicago hit a two year high of $US8.68 a bushel after the Russian ban was announced. They eased 0.5% to $US7.41 a bushel in electronic trading in Asia yesterday.
According to an estimate from the government this week, Russia’s grain crop stood at 49.7 million tonnes, down 32% from the same time in 2009, thanks to the drought.
Russian Prime Minister, Vladimir Putin said 10 days ago the ban on exports will remain until 2011’s crop is harvested.
The Bureau said, "Winter cropping regions in the eastern states are in a positive position after receiving average to above average rainfall for July and August.
"Widespread rainfall recorded in the eastern states in the first two weeks of September has further boosted the already high winter crop yield expectations.
"In contrast, most cropping regions in Western Australia have remained dry throughout winter, following on from a dry autumn and summer.
"Yield potential has been significantly reduced and, as a result, good regular rainfall is required over the next several weeks to achieve, at best, average yields."
The three million tonne boost came despite production in Western Australia being revised down, but the bureau said "this has been more than offset by forecast increases in the other states".
Australian barley production in 2010–11 is forecast to be 8.8 million tonnes and canola production is forecast to be 2.2 million tonnes.
Overall, Australia’s total production of winter crops, including wheat, barley and canola, may climb to 40.7 million tonnes this season, the third-largest on record, up from a June outlook for 35.1 million tons, according to the report.
The Bureau warned that there was a risk to the crops in eastern states from a locust plague and reduced yields because of stripe rust, even as there is also potential for larger-than-expected production.
“While locust damage for individual properties and regions can be significant, damage to crop production from a national perspective has been relatively low in past outbreaks,” according to ABARE-BRS.
Production of summer crops, planted in the next few months and harvested next year, is also forecast to rise from a year earlier.
The Bureau said, "Total summer crop area is forecast to rise by 60 per cent to 1.3 million hectares in 2010–11, compared with the below average plantings last season.
"The area planted to cotton and grain sorghum is forecast to rise by 96% and 55%, respectively, while rice plantings are forecast to more than triple."
Rice output is forecast to almost treble to 611,000 tonnes from 206,000 tonnes last season, while cotton-lint output may climb to 653,000 tonnes (2.9 million bales of 227 kilograms each) from 387,000 tonnes last harvest, the report said.
World cotton prices hit new 15 year highs overnight as the huge Indian processing industry pleaded for export bans to protect local companies from the surge in global prices.
India’s problem is greed and the impact of the terrible floods in Pakistan on that country’s crop.
The Indian industry went mad late last year and in early 2010, shipping record amount
