Australia wheat situation

Continuing with the follow up of the wheat scenario for the days to come we now examine some forecasts for Australia. As Argentina will have a significant constraint in wheat hectares planted, it is very important to understand how the other main producer of Southern Hemisphere is reacting.

In the just released ABARE’s June 09 Australian Crop Report - the Key points were

· No big surprises in this report but winter crop forecasts at this point in time are extremely risky.

· Total summer crop production in 08/09 (just harvested) is estimated to have fallen by 11pct to 3.5mt, due mainly to a moderation in sorghum yields.

· Total winter crop production for 09/10 (just planted) is forecast at ~35mt, a 5pct increase on 08/09. The total winter crop area is estimated at ~22m ha, which is 1pct larger than last year.

· All winter crop estimates for the southern wheat belt are extremely contingent on good in-crop rains due to low soil moisture reserves. The long term outlook is mixed.

· The 2009/10 Australian wheat crop forecast at 22mt, up slightly from last year and above the prior 7yr average of 19.5mt. Improved yields in sthn NSW, Vic and SA is seen supporting production. Decline in WA production due to a return to more normal seasonal conditions after last year’s big crop.

· The increase in wheat production is expected to be associated with an increase in exports.

Source Agri Food Think Tank