Western Australia forecast to produce 9.04 mil mt wheat in Oct 2016-Sep 2017: GIWA


Western Australia is forecast to produce 9.04 million mt of wheat in the October 2016-September 2017 harvest season, down from an earlier estimate of 10.45 million mt, according to the latest report from the Grain Industry Association of Western Australia, or GIWA, released Friday.

GIWA cut its wheat output forecast by 13.5%, or 1,408,000 mt, from its earlier forecast released in the October report. In October, it had estimated output to be about 10.5 million mt, down 3.6% or 390,312 mt, from the September forecast.

The latest forecast is down 1.8% from the October 2015-September 2016 wheat production of 9.2 million mt, the report said.

The lower wheat output was attributed to yield losses due to widespread and multiple frost events over September-October.

Western Australia was initially expected to produce a record 10 million mt of wheat, but “widespread and multiple frost events over September to October 2016” led to yield losses, the report said. Concerns over grain quality issues were also raised in the November report.

GIWA expects grains affected by frost to be downgraded, particularly in the Geraldton and west Kwinana zones where grain fill was occurring during the frosts.

Elsewhere, quality should be unaffected, if not enhanced, for protein and size, such as in the Albany and Esperance zones, where grain fill had not started, it said.

Wheat harvesting in 2016 was delayed by about three weeks, with Geraldton starting harvesting last week. According to GIWA, there are more general purpose grade wheat with lower protein being downgraded in Canna to Tardun area although other districts were achieving about 10.5% protein in general.

In response to the lesser than optimistic yield and quality expectations, South Korean millers, via Korea Flour Mills Association, on Friday secured 151,600 mt of Australian wheat for March-April, second-half April and May shipments through an open tender.

It bought a total 15,700 mt of 11.5% wheat or AH2, at $228/mt for March and April and $223/mt for May.

The premium for higher protein wheat over Australian Premium White wheat was recently wider on supply worries, at $18-$20/mt, as opposed to $10/mt a few months ago, according to market sources.


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