Australian rainfall boosts wheat crop expectations

Favourable rains in May have boosted production expectations for this year's wheat crop, although the growing season has only just begun, Rabobank Australia Ltd. reported Tuesday (June 2).

More planting rains will be needed in the coming weeks in Western Australia, southern New South Wales and Victoria, it said in a monthly review.

The bank noted that the US Department of Agriculture in mid-May forecast the 2009-10 Australian wheat crop would yield 23 million tonnes, up 7.5 percent on actual output last crop year ended March 31.

"This increase, while possible, is at the top end of market expectations at this stage," Rabobank said.

The current forecast of the government's s Australian Bureau of Agricultural and Resource Economics for new crop wheat production is 22.1 million tonnes. Abare will update its projection in a crop report scheduled for issue June 16.

The wheat crop is mostly harvested in November and December. After Australia's domestic wheat demand of about 6 million tonnes a year is met, the balance of production is available for export, making the nation a major supplier to the global trade.