October 25, 2011
Australia's 2011/12 wheat yield to hit near-record level
Positive weather in Australia's top grain exporting state of Western Australia has led the country to be on track to reap a near-record wheat production in 2011/12, according to analysts and traders on Monday (Oct 24).
According to Reuters, an advisor at commodities trading firm Advance Trading Australasia said the world's fourth largest shipper of the grain could export as much as a record 21 million tonnes in the marketing year to September 2012.
"Exports could easily be in the 20-21 million tonnes range," said the advisor, who estimated 2010/11 exports at around 18 million tonnes.
The previous record was in 1996/97 when 19.2 million tonnes of the grain were sold overseas.
Analysts estimated around nine million tonnes of old crop wheat remained unsold at the end of the 2010/11 marketing year, adding to the export task at a time when global supplies are abundant.
Australia's 2011/12 harvest has just begun but is picking up speed just as the northern hemisphere wheat harvest draws to an end.
The front month CBOT wheat futures contract <Wc1> has fallen from a 2011 peak of US$8.93-1/4 per bushel in February to US$6.45-1/4 on Monday.
US farmers are withholding stock from the market, hanging out for higher prices, while Australian farmers have refrained from forward selling the new harvest with the same hope.
The USDA on October 12 projected a 5.4 million tonnes rise in global wheat supplies for 2012/12 from a year earlier.
The USDA said larger stocks in 2011/12, following big harvests in major grain exporting countries such as Australia and Canada, coupled with higher old-crop stocks, would be behind the rise in global stocks to a 10-year high.
In September, Australia's government chief commodities forecaster estimated the country's exports for 2011/12 to hit 20.4 million tonnes. It put the harvest now getting underway at 26.2 million tonnes, just short of the record 26.3 million tonnes reaped in 2010/11.
Other estimates are more cautious.
Advance Trading's Woodhouse said his firm estimated the current crop at 24.39 million tonnes, of which around nine million tonnes would be reaped in Western Australia, double last year's drought-plagued western harvest. In 2003/04, Western Australia reaped a record 11 million tonnes crop.
Advance Trading has raised its estimate from 23.7 million tonnes last month following recent rains across the country that boosted crop prospects.
Australian Crop Forecasters (ACF) has a similar number.
"We are looking about a 24 million tonnes harvest which may be on the low side," said an analyst at ACF (ACF).
He said there remained the possibility of the harvest being hampered by wet weather in eastern Australia as was the case last year when nearly half the crop was downgraded to general purpose or feed wheat quality as rain soaked fields.
ACF's analyst also added that Western Australia, which exports almost all of its grain, would be the stand-out performer this year. It also expects a near-record crop of around nine million tonnes.
"Overall quality across the country should also be better. It is likely to be a more normal year with 75-85% being of milling wheat quality although higher protein wheat will still be tight," said the analyst.
Harvesting has already begun in the north-eastern state of Queensland, which is expected to yield a 1.5 million tonnes crop, in line with an average year.
The analyst said some crops had struggled due to water-logged fields at the beginning of the year, leading to lower protein levels. The state typically produces a large portion of 13% plus protein wheat which globally is in short supply.