April 4, 2011

Australia to plant near-record wheat area

High prices and perfect soil moisture levels are the factors which will increase the amount of land Australian farmers use to plant wheat at a near-record level.

However, this will be done at the expense of barley, for which sowings will hit a nine-year low.

Excessive rain appears to be the biggest threat to growers in the southern hemisphere's top wheat exporting country sowing 13.8 million hectares with the grain, second only to the total two seasons previously, according to the attaches from USDA in Canberra.

"The continuation of above-average rainfall would likely disrupt planting and, in the worst case scenario, constrain planted area," the attaches said in a report.

The likely outcome was for sowings for 2011-12 to come in only 200,000 hectares short of the record, with seedlings encouraged by current soil moisture prospects and elevated prices. East coast wheat for January delivery, the key new crop lot, closed up AUD3 (US$3.11) at AUD303/tonne (US$314.76) in Sydney on Monday (Mar 28).

Even the revival in the fortunes of Australia's livestock industry was unlikely to slow wheat's march, with historically low sheep numbers and abundant pasture and fodder supplies likely limiting competition for land from livestock industries.

Furthermore, the sowing window looks likely to be long, given that high soil moisture levels are already in place, a factor which looks set to mitigate against sowings of barley.