June 26, 2006

Australia needs more rain, wheat output may fall 3 million tonnes
 

Wheat growing areas in Australia need more rain to enable more crop plantings and help germination and growth of those already sown, the government's chief commodities forecaster, the Australian Bureau of Agricultural and Resource Economics (Abare) reported in its quarterly outlook publication issued Monday (Jun 26).

By mid-June, much of Australia's winter grains belt was still in need of rainfall that would enable the bulk of plantings to begin, it said.

Although some planting of seed into dry ground occurred, it can be risky in terms of variable germination and subsequent weed management when it does rain, Abare said.

However, widespread rainfall in New South Wales in mid June would have allowed some growers to plant most of their intended crops.

Abare estimates that in Victoria and South Australia, many crops were planted after rainfall in early May, but followup rains are needed for these crops and for further plantings to take place.

Although wheat in Australia can be sown as late as mid July, the yields would have been smaller.

Abare reiterated its June forecast for wheat output that production this crop year would fall to 22.8 million tonnes from an actual 25.1 million tonnes last crop year ended Mar 31, 2006.

Gross returns to Australian farmers from the new crop, based on AWB's benchmark Australian Premium White grade of 10.5 percent protein export pool price for its collective sales, are projected to surge 19 percent to AUS$223 (US$163.2) a tonne from the coming crop from an estimated A$188/ton (US$137.6) from the old crop, the report said.

Abare forecast the price of the indicator US hard red winter wheat, free on board, Gulf of Mexico, to average US$196 a tonne next fiscal year starting Jul 1, up from US$176/tonne this fiscal year, in part reflecting a shortfall in demand versus supply and a decline in stock levels.