Australian wheat plantings jump, get boost from rain

 

 

Heavy rainfall in recent days on wheat lands in Western Australia bolstered prospects for what could be the nation's largest-ever wheat crop, Richard Koch, managing director of Perth-based marketing advisory service Profarmer Australia, said Friday (July 10).

 

"At this stage we could have a wheat crop of anywhere between 10 and 30 million" tonnes, he told Dow Jones Newswires by telephone. "If we were to get good July and August rain, and a kind spring, certainly we could get a big crop here."

 

Most official and private forecasts are in a range 22 million-23 million tonnes compared with an actual 21.4 million tonnes from 13.5 million hectares last crop year ended March 31. Production peaked in the 2003-04 crop year at 26.1 million tonnes from 13.1 million hectares. After annual domestic demand of almost 7 million tonnes is met, the balance is available for export, usually making Australia a major supplier of globally traded wheat.

 

Koch was commenting after widespread heavy rainfall across Western Australia's northern wheatbelt - mostly in a range 30 millimetres to 50 mm in the week ended Friday morning, with falls expected to continue Saturday and Sunday. Decent rains are forecast in South Australia and southeast Australia for several days from Monday.

 

Conjecture about the possibility of a big crop has also been spurred by a survey by Profarmer that shows the area planted to wheat nationally has increased 19 percent from a year earlier, in part due to sound rains prior to and during sowings.

 

Profarmer's survey, which brought together responses from 900 growers that account for almost 7 percent of national wheat acreage, isn't statistically valid, so Koch warned to be wary about the quantum of the increase in area planted.

 

"Certainly, I'm confident in the trends and the key trends we've identified there are an increase in wheat plantings and a decrease in barley plantings," which is in part price driven, he said.

 

Koch said the best weather patterns for many years seem to be pushing rain-bearing westerly weather systems through Western Australia and into south and southeast Australia.

 

This is positive for wheat production in those areas but rain must continue into spring to get above average yields as there was little existing subsoil moisture, he said.

 

At the same time, he warned that wheat production could come in near the lower end of his range if rains stop now. In 2007, no sooner had growers in southeast Australia finished planting amid widespread optimism than the rains ended and didn't start again until just prior to a much diminished harvest of withered crops.

 

Separately, Michael Musgrave, senior operations manager at Western Australia's monopoly logistics concern, Cooperative Bulk Handling Ltd, said it is maintaining an estimate of grains receivals in a range of 8 million-11 million tonnes though CBH's expectations are at the higher end of that range. CBH received more than 12 million tonnes of grain from the last harvest.

 

"While recent rains have sparked a fair bit of optimism, good follow-up rainfall is needed in the coming months to secure a strong finish," he told Dow Jones Newswires.

 

In a good sign for rainfall in southeastern Australia, the most recent value of the Indian Ocean Dipole or IOD is slightly negative after many weeks in positive territory, the Bureau reported this week.

 

A negative IOD has in the past been associated with an increase in rainfall over parts of southern Australia, it reported.

 

In northern New South Wales, possibly Australia's biggest wheat grower, Ron Greentree, hopes for a bumper harvest from the 94,000 hectares of winter crop - mostly wheat - he has planted in the past two months.

 

"Things look pretty good," he told Dow Jones this week. "But it doesn't matter where you are in the wheatbelt in Australia, September is the make or break month."