August 25, 2011

 

Forthcoming rain lifts Australian wheat prospects

 

 

The chances of boosting high protein wheat output for Australia have improved following the country's weather bureau forecast on Wednesday (Aug 24) of rain this weekend across parched regions that produce high quality wheat.

 

The promise of rain comes as buyers' interest in Australian wheat has resumed because of tight global supplies of high-quality milling grains after weather-related setbacks in North America and Europe.

 

The weather bureau forecast moderate rain for the northern region of New South Wales and southern Queensland states where much of the country's higher protein wheat is produced.

 

The area has missed out on crop boosting rain since the start of July, raising fears of crop failures.

 

"There would be some late winter crops (including wheat) up in the region that would benefit if we do get the rain forecast," said Luke Mathews, an agricultural commodity strategist at Commonwealth Bank of Australia.

 

Australia, one of the world's key wheat exporters, had a record 26.3 million tonne harvest in 2010/11.

 

Analysts expect Australia's exports for the marketing year to September 30 to approach the record 19.2 million tonnes shipped overseas in 1996/97.

 

A wet harvest in 2010/11 downgraded much of the crop to general purpose or feed grade but a voracious appetite for livestock feed in Asia, an absence of Black Sea supplies because of drought and high corn prices increased demand for lower quality Australian wheat.
 

Hopes are rising that the weather will be kinder when harvesting moves into full swing in November although spring rain is needed.

 

"There's plenty of potential in the crop but everyday without rain it gets less and less," said Bruce Schwartz, who in May and June planted 1,000 hectares of high protein Australian Prime Hard (APW) wheat on his farm, about 800 km (497 miles) north-west of Sydney.

 

While there was adequate subsoil moisture when crops were planted, a lack of winter rain left top soils parched in the north-eastern grain belt, where Schwartz's property is located, causing crops to struggle.

 

Further south crops are in better shape, boosted by drenching rains last week.

 

"So far, so good, but it still could quickly turnaround," said Chris Groves, a grain farmer in the central-west district of New South Wales state.

 

Looming risks ahead of the harvest include a lack of spring rain, chances of a yield-damaging spring heat wave, late frosts and a potential mice plague because of an abundance of food.

 

Australia's chief commodities forecaster in June estimated Australia could reap a 26.2-million-tonne harvest in the 2011/12 marketing year which starts on October 1.

 

But private forecasters are more conservative expecting the 2011/12 harvest to deliver around 24.6 million tonnes.

 

Production in eastern Australia is likely to fall after a bumper harvest in 2010/11 but the crop in Western Australia, typically the largest grain exporting state, is on track for a recovery.

 

Overall, grain growers across the country are hopeful of a better than average harvest. Over the five years to 2010/11, the national harvest averaged 18.79 million tonnes per year.

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