February 16, 2011

Australia reduces official wheat forecast slightly

Australia has downgraded official wheat forecasts, but the reduction was not as severe as anticipated by analysts.

Official forecasters in the southern hemisphere's top wheat exporting country acknowledged the loss of some crops in eastern states because of flooding and fungal disease, following persistent rains.

In New South Wales, the top producing sate this year, rains started to cause significant problems from November, including substantial harvest delays, an increase in the prevalence of fungal disease and significant damage to grain quality.

Indeed, about half the New South Wales crop was downgraded to feed quality, with most of the Queensland harvest deemed of "feed and general purpose" use and, in South Australia, downgrades were caused by "sprouting, mildew infestations and fungal staining."

However, the officials at crop bureau Abares cut their overall crop forecast by 500,000 tonnes to 26.3 million tonnes, still sufficient to beat the 26.1 million-tonne record set seven seasons ago.

This in part reflected a 1.1 million-tonne upgrade to 4.7 million tonnes in the crop in Western Australia, usually the country's top producing state, but which suffered its driest ever year in 2010.

Furthermore, Abares kept its estimate for Australia's exports in 2010-11 at 16 million tonnes, despite the strain that an east-focused, and late, harvest poses to grain logistics focused on the country's east coast.