Australia 2009-10 wheat forecast held at 23 million tonnes

 

 

Rabobank Australia has held unchanged its monthly forecast for Australian wheat production this crop year at 22.8 million tonnes, if achieved up 6.5 perccent on actual output of 21.4 million tonnes in the crop year ended March 31, 2009.

 

If this year's bigger crop comes to pass, Australia will have more wheat available for export after annual domestic demand of six million to seven million tonnes is met, further increasing volumes in a well-supplied global market.

 

With the harvest now underway in northern growing areas in New South Wales and Queensland, production results remain mixed given this region bore the brunt of dry weather in early spring, the bank reported in a monthly commodity review.

 

In other growing areas, the crop looks average to above average with "potentially record crops in both South Australia and Western Australia," it said.

 

Rabobank's estimate is 100,000 tonnes above a projection by the government's chief commodities forecaster, the Australian Bureau of Agricultural and Resource Economics.

 

Meanwhile, heavy rain this week in parts of northern New South Wales and southern Queensland states hasn't disrupted harvest unduly or caused any problems with grain quality, and would have helped crops in some areas, said David Ginns, corporate affairs manager at GrainCorp Ltd., which dominates upcountry grain storage in eastern Australia.

 

The flow of newly-harvested grain to company storages from farms will have stopped in some places, but the harvest hasn't ground to a halt--and after a dry spring, stripping of crops will resume pretty quickly, he said.

 

"What we don't want is follow-up rain in far northern areas," Ginns said by telephone.

 

The rainfall, mostly on Monday and Tuesday, drenched much of northern New South Wales with falls mostly in a range 25-50 millimetres, according to the government's Bureau of Meteorology.

 

The moisture will likely benefit later-sown crops in eastern and central-western areas of New South Wales, where winter crops could be a month away from harvest, and also boost prospects for summer crops including cotton and sorghum, which are now being planted, Ginns said.

 

Rabobank said the prospect of a moderately large harvest n Australia and a strong Australian currency relative to the US dollar has "severely limited any upside for domestic prices."

 

The nearby ASX January milling wheat contract settled yesterday at A$208/tonne delivered port in New South Wales, down from a recent peak of A$221 Monday (Oct 26) after staging a A$20 rally over the previous week. It is still be barely two-thirds of its price in early June, when crops were being planted, of more than A$300/tonne.

 

US$1 = A$1.11156 (Oct 29)