October 20, 2003
Australia Wheat Harvest Hit By Frost, Harvest Forecast of Only 24 Million MT
Australian farmers' optimism for a record wheat harvest has been curbed by frost, which has damaged crops across three states, traders and analysts said.
Australia, the world's second-largest wheat exporter, may gather 24 m metric tons of the cereal from the harvest that started earlier this month and ends in January, according to the median forecast in a Bloomberg News survey. The harvest could have eclipsed a record 24.76 million tons had late-September frosts not damaged crops in three states. Western Australia is poised for a record crop, they said.
"It's going to be a big crop because of Western Australia," said Malcolm Bartholomaeus, a grain analyst with Callum Downs Commodity News at Clare in South Australia state.
"But I'm not comfortable pushing the forecast much higher than 24 million tons" because of frost in parts of New South Wales, Victoria and South Australia states, and lingering drought.
Chicago wheat futures prices have declined almost 9% this month, partly on expectations of a bumper Australian harvest that would increase competition for U.S. supplies on export markets. Earlier this month, Australia beat the U.S. for a sale of 180,000 tons of wheat to Egypt at a price that was $2.50 a ton lower than what the US requested.
Wheat for December delivery rose 0.25 cent, or 0.1 percent, to $3.285 a bushel in after-hours electronic trading on the Chicago Board of Trade at 4:41 p.m. Sydney time.
Forecasts for the Australian wheat crop in the survey of nine traders and analysts ranged from 23.5 million tons to 25 million tons. Farmers gathered 9.39 million tons from the last harvest, which was slashed by the nation's worst drought in 100 years.
Crop Deterioration
The survey follows a report Friday from NETCO Co-operative Ltd., a group representing farmers who produce about a fifth of the nation's grain, that the wheat crop in eastern Australia had deteriorated between July and September.
Wheat crops of "poor" or "very poor" condition doubled to 28%, the group said. In July, most farmers reported good conditions.
Western Australia, Australia's biggest grain-producing state, may harvest a record 14 million tons of wheat, barley and other winter crops this season, Co-operative Bulk Handling Ltd., the state's dominant grain handler, said last week. Wheat typically represents about 70% of the grain harvest.
Frost
Frost on Sept. 28 and 30 affected some crops in northern and central New South Wales, the country's second-biggest grain-producing state, said Frank McRae, an agronomist with New South Wales Agriculture at Orange. The agency hasn't yet quantified the loss in production from the plunge in temperature below freezing, which killed wheat stalks and damaged grain kernels.
"We suspect there is some significant damage in most areas in isolated cases," McRae said in an interview. "Some producers are going to suffer pretty disastrous losses and for others there will be only a minimal effect."
