August 3, 2011

Australian wheat crop affected by unfavourable weather

Australia's wheat production may decrease as the major eastern grain producing state of New South Wales is affected by cold and dry weather, according to a report by the Commonwealth Bank of Australia on Wednesday (Aug 3).

According to Reuters, offsetting the deteriorating outlook in New South Wales is an improved outlook for Western Australia, typically the biggest grain exporting state in the world's fourth-biggest wheat shipper.

"We have seen an improvement in production conditions in Western Australia which is positive," the report said.

The bank's agricultural commodities strategist is keeping his forecast of a 24.3 million tonnes 2011/12 wheat harvest, made in May, but may adjust it following visits to crop growing areas this month.

The forecast is in line with other private forecasts but sits below the government's chief commodities forecaster's estimate of 26.2 million tonnes crop for 2011/12, just below its estimate of a record 26.3 million tonnes crop last season.

In 2010/11, the harvest was boosted by rain in eastern states that increased yields at the expense of quality and offset a large drop in the Western Australian harvest due to drought.