September 25, 2009

Australian wheat production this crop year will reach 21.8 million tonnes with a strong outlook in southern regions expected to offset losses in the north, if achieved up from an actual 21.4 million tonnes last crop year ended March 31, 2009, Perth-based marketing advisory service Profarmer Australia said late Thursday (September 24).

 

The forecast is down from an estimate of 22.7 million tonnes reiterated Tuesday by the government's chief commodities forecaster, the Australian Bureau of Agricultural & Resource Economics, but comfortably within a range of estimates by other industry organizations and analysts.

 

Profarmer establishes its estimate by generating a crop condition index for each state then reckoning trend changes in the area planted. About two thirds of Australia's wheat crop will be available for export, making it a major supplier to the global trade.

 

Rain across Victoria, South Australia and Western Australia states over the past week continues to boost crop prospects "and proceeds to set up a big harvest," Profarmer reported in a weekly industry review.

 

New South Wales received patchy rain this week and conditions continue to go backwards, with rain in the next two to four weeks critical, it reported.

 

Windy hot weather this week, particularly in northern New South Wales and Queensland, won't do much damage to early planted crops "as the yield are made", though some quality issues may be evident, but this will depend on the stage of the maturity of the crop, it reported.

 

Later-planted crops in these areas will be hardest hit, with the area of failed crops grazed off to livestock to increase, further reducing harvested area and total production, it reported.

 

This week, for the first time in three years, ASX nearby milling wheat futures traded below A$200 (US$172.86)/ tonne, despite the poor crop conditions in northern growing area, it noted.

 

"Be prepared to see prices lower in the short term," it said.

 

January milling wheat futures deliverable in New South Wales settled Thursday at A$198/tonne, down 50 cents on the day.

 

Profarmer's barley production estimate for this crop year is 7.4 million tonnes, compared with Abare's 7.9 million tonnes forecast and an actual 6.8 million tonnes last crop year.

 

Profarmer estimated canola output at 1.7 million tonnes, down just a tad from Abare's forecast and down from 1.9 million tonnes last crop year.

 

US$1 = A$1.15 (Sep 25)