July 6, 2009

Production from Australia's new wheat crop should reach 22.5 million tonnes, if achieved up 5.1 percent on year, but there are significant risks, Commonwealth Bank of Australia warned late Thursday (Jul 2).

Current conditions across the majority of the Australian wheat belt are generally good, commodity strategist Luke Matthews reported in issuing the bank's forecast for the new cropping season.

But he warned output will fall without sufficient rainfall in late winter and spring, particularly in the southern growing regions, with production below 20 million tonnes "a distinct possibility."

While an "extremely kind" growing season could result in a crop in excess of 25 million tonnes, the likelihood of an El Nino as reported by the Bureau of Meteorology and an associated increased chance of below average rainfall suggest "downside risks exist to winter grain forecast."

Based on the current production estimate, Australian wheat export availability from production in the current crop year ending March 31, 2010 will likely be around 15 million tonnes, he said. Australia usually is a major supplier of globally traded wheat.

The bank's estimate is comfortably within other recent projections.

Forecasts over the past month for the wheat crop to be harvested late in the year include 22 million tonnes by the government's Australian Bureau of Agricultural and Resource Economics, 22.6 million tonnes by National Australia Bank Ltd. and 23 million tonnes by Rabobank Australia Ltd.