September 10, 2007

 

Australian 2007 wheat crop estimated at 15-19 million tonnes
 

 

Production from Australia's wheat crop to be harvested in October through December could reach 15 million to 19 million tonnes, according to an estimate issued Monday (Sep 10) by Rabobank Australia Ltd.

 

But the crop could undershoot this range if the weather remains dry in coming weeks, it said in a monthly review of Australian agriculture.

 

"The first two weeks of September will be critical in determining the size and quality of the grain crop," Rabobank commented.

 

Recent rains helped crops in northern New South Wales and southern Queensland, but other areas of New South Wales, Victoria and parts of South Australia and Western Australia "are in critically dry condition and have been affected by unseasonably warm conditions," it said.

 

Rabobank added that a new crop production forecast for canola of 1.66 million tonnes by industry services concern Australian Oilseeds Federation, also has weather-related downside risk.

 

Rabobank's forecast and risk outlook is broadly in line with a range of estimates reported last week. However, a prominent grower and contract harvester, Bruce Estens, was reported saying the wheat crop could fall to 10 million tonnes - about the same level as drought-affected production last crop year ending Mar 31.

 

Global wheat futures markets, which posted a series of record highs last week, are focused on crop conditions in Australia and Argentina, given tight supplies and strong demand.

 

Australia is usually a major global wheat supplier after domestic demand of about 7 million tonnes is met.

 

ASX January 2008 milling wheat futures, the most active local contract, traded up to A$423/tonne Wednesday before falling for two days.

 

This contract resumed its advance Monday, trading at A$424/tonne, up 6.8 percent from Friday's close, up 58 percent from its Aug 1 level of A$269/tonne when concerns first began to emerge about the local crop, and almost double its low of A$215/tonne in early April.

 

Fresh production forecasts will be issued in a crop report scheduled for Sep 18 by the government's Australian Bureau of Agricultural & Resource Economics.