Question mark hangs over Australian wheat crop

28.11.2016

Just how big is the Australian wheat harvest going to be?

The International Grain Council left its forecast for the Australian crop at a five-year high of 28.3m, despite unfavourable harvest conditions, as it balanced worsening prospects in the west of the country with an improvng outlook in the east.

"Multiple frosts likely resulted in some production losses in Western Australia," said IGC.

But although early fieldwork in eastern Australia has been slowed, "plentiful rains are expected to support good yields across eastern cropping regions".

Local prospects rise

True, the IGC forecast is big, up 4.1m tonnes year-on-year. The US Department of Agriculture sees a similar size growth in the crop as well.

But even more positive expectations for the crop seem to be circulating in Australia.

IGC reports "some local projections now moving above 30.0m tonnes".

And the grain handler Nidera still sees the wheat crop at record levels, i.e. above 31m tonnes.

CBH trims Western Australian hopes

But CBH, Australia's largest grain exporter, is more bearish on prospects, due to the recent weather development.

Total grain output in Western Australia was seen at 13-14m tonnes, down from its previous estimates of 15-17m tonnes.

This suggests wheat production of 7.8m-8.4m tonnes.

Late last month the National Australia Bank forecast Australian wheat production at 27.6m tonnes, but warned that "uncertainty in New South Wales could see this number swing either way, although more likely on the upside".

Logistical challenge

If a big crop does develop, Australia may struggle to find a market for it, Nidera warned.

"If Australia manages to export 20m tonnes of wheat before next year's harvest, any production over 28m tonnes this year will still add to the carry out into next season," Nidera said.

And Nidera pointed to the logistic challange posed by the export campaign ahead.  

If other grain exports add a further 10m tonnes, Nidera said exports would equate to 600,000 tonnes, or 15 handymax size vessels, leaving Australian ports each week.


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