October 16, 2006

 

Australian wheat output estimated to be down 60 percent

 

 

Production from a drought-affected Australian wheat crop would be unlikely to exceed 10 million tonnes, meaning it would be down more than 60 percent from the output the last crop year ended Mar 31, Ingrid Richardson, grains analyst at Rabobank Australia said Monday (Oct 16).

 

A more specific estimate for the new crop is difficult given crop conditions are deteriorating daily in the face of unseasonably hot, dry weather. Moreover,  many crops are being baled for hay, which will take a lot of grain out of the system, she said.

 

An estimate of less than 10 million tonnes is "reasonable" for now, and it would be less than output from the last drought crop in 2002-03 of 10 million tonnes, as the current situation looks a lot worse than then, she said.

 

Production estimates were complicated by the fact that many farmers would hold onto their production rather than delivering to market, she said.

 

Last week, the USDA slashed its estimate of Australia's wheat crop to 11 million tonnes from its September estimate of 19.5 million tonnes.

 

Last Tuesday, Ron Greentree, one of Australia's biggest wheat producers, who retired in December as chairman of east coast logistics provider GrainCorp Ltd, forecast output in a range of 6 million to 8 million tonnes, saying growers are in denial about the poor condition of the crop.

 

The harvest is gathering pace in northern growing areas and likely would be finished around growing areas near the south coast around Christmas.

 

The plunge in Australian production would limit export of the new wheat crop after Australia's domestic needs of about 5.5 million tonnes are met.

 

Exporter AWB Ltd said availability of new crop wheat would fall sharply, while the company would cease wheat exports from east coast ports after the current contracts are filled but continue shipments from Western Australia and South Australia.