April 20, 2009

Australia's wheat production may drop by less than one percent as an expected yield increase offsets lower plantings, the National Australia Bank Ltd. said.

Output may reach 21.2 million tonnes in 2009-10, down from last year's 21.4 million tonnes. Output for rapeseed is also seen declining 22 percent and barley production to fall five percent.

Australian farmers will plant their next winter wheat, barley and rapeseed from this month if they receive sowing rains, and will begin harvesting from about November. Some farming regions in the southeast may have drier than average weather in the three months to June, the Bureau of Meteorology said.

Low soil moisture profiles and a poor three-month outlook for rainfall have lowered planting intentions in southeast Australia, according to agribusiness economist Frank Drum.

Farmers are reluctant to extend debt levels and that may also constrain winter crop plantings, Drum said.

Wheat area may drop five percent, and the area planted to winter crops in southeast Australia will fall considerably, the bank said.

But Western Australia, the country's largest grain producing and exporting state, will increase plantings if sowing rains arrive, said CBH Group, the state's largest grain handling.

The bank also projected barley production to fall to 6.5 million tonnes, and rapeseed output to slump to 1.3 million tonnes.