May 14, 2012

Australia's 2012-13 wheat production likely down on unfavourable weather

Due to the end of favourable seasonal conditions, Australia's 2012-13 wheat production is likely to decline after two consecutive record crops, Macquarie Commodities Research said Friday (May 11).

"The bumper crops that we have seen in Australia are unlikely to continue for a third consecutive season as the La Nina is over and we look far more likely to move into an El Nino" weather event, Macquarie said in a global review of corn, wheat and soy fundamentals.

There has also been some increase in plantings of rapeseed in Australia due to far more favourable economics versus wheat, Macquarie said.

Australian wheat output this crop year will total only 25 million tonnes, it said, down from a record 29.5 million tonnes last year and 27.9 million tonnes the year before that. Australia requires only around six million tonnes of wheat annually to meet its needs. It exports the balance of its output, making it one of the biggest providers of wheat to the global market.

Decent rainfall in Western Australia over the past week has prompted widespread planting of winter crops in the Great Southern area and the southeast wheat belt, areas that have suffered from dry weather and resulting poor crops in recent years, Shane Sander, a risk-management adviser at commodity manager AGvise, said by phone.

Planting is also likely to be underway through western areas of the central wheat belt, where some areas received more than 20 millimetres of rainfall in the past week, he said. But farmers in many areas in the north, northeast and eastern wheat belts are likely still "skyward gazing," he said.

Western Australia has produced more than one third of Australia's total wheat production in recent years.