October 18, 2010

Droughts slash hopes for Australian rapeseed

Flooding in the Australian state of Victoria has emerged, with Western Australia's drought, as a serious threat to crop production, helping fuel a 185,000-tonne downgrade to the national rapeseed harvest.

The Australian Oilseeds Federation (AOF) cut by 8.2% to 2.07 million tonnes its forecast for the rapeseed crop. The revision reflected in part the declining expectations for the harvest in Western Australia, the country's top grain and rapeseed grower, where persistent drought has already prompted a series of downgrades to wheat output.

However, AOF also said that the rains which had appeared set to put Victoria on course for a bumper harvest had in some parts of the state proved too much. A recent spell of dry weather "has been too late to save some of the crop in the high rainfall zone."

The federation, which cut 30,000 hectares from its forecast for the Western Australian crop making it to harvest, also chopped 20,000 hectares from its estimate for Victoria, citing "total crop loss, or crops being cut for hay."

The revision follows mounting concerns over the rain in Australia's eastern regions which, while boding well for yields, may diminish crop quality.

Luke Mathews, at Commonwealth Bank of Australia, highlighted that the strengthening La Nina weather pattern may increase harvest rain, resulting in the downgrade of some wheat to feed quality.

AOF's latest figure for the national crop is 200,000 tonnes shy of the estimate release last week by the USDA, whose data set the global benchmark. The USDA is also more upbeat over the crop in Canada, the top exporter, than local observers.

Canada's farm ministry overnight forecast the domestic crop at 10.4 million tonnes, 400,000 tonnes lower than its previous estimate and 600,000 tonnes below the USDA's figure.