April 11, 2011
 

Australia's wheat plantings may set new record

 

 

Australian farmers' competition to make the most of high wheat prices became stronger than was originally thought, with seedings potentially setting a record, sacrificing barley sowings.

 

Farmers in the southern hemisphere's leading wheat-exporting nation will probably plant more than 14 million hectares of the grain for 2011-12 when sowings start in a few weeks' time, Rabobank said.

 

This would mean an increase of wheat plantings of at least 600,000 hectares, as compared to a year before, and could possibly break the record, which stands at 14.03 million hectares, and was set in 2009-10.

 

It would also surpass approximations of 13.8 million hectares by Abares, the official Australian commodities bureau, and USDA attaches stationed in Canberra.

 

The extra plantings of wheat, and a prediction increase in rapeseed plantings too, will come at the expense of barley areas, the bank said."This is not surprising, given the stark discounts received for feed barley in 2010-11."

 

Feed barley, closed on Friday (Apr 8) at AUD217.50 (US$230) a tonne, a discount of 27% as compared to east coast milling wheat, with which the grain was almost on par last autumn.

 

The gap is judged not likely to close, given the amount of milling wheat downgraded to feed by wet harvest conditions late last year.

 

Luke Mathews at Commonwealth Bank of Australia said, "This historically-wide spread is likely to persist for the next 12 months as domestic feed grains remain plentiful compared to high-protein milling wheat supplies. "Only strong export demand from feed grains has prevented this spread from widening further."

 

Rabobank also noted the extraordinary conditions for east coast farmers, who have been left by the constant rains with abnormally high soil moisture levels.

 

However, the bank stopped short of projecting the 2011-12 crop setting an output record, given the risk that additional rains would pose to fieldwork on the east coast, and prospects of only average rains for Western Australia, where soil moisture is awfully low.

 

Separately, Australia & New Zealand Bank said that rains in Western Australia, usually the country's leading grain-growing state, have barely been sufficient to settle the dust in most of the state's wheat belt.