Mixed result on crop output
Australia is likely to experience one of the most mixed winter crop harvests in years, with Western Australia on track for above-average wheat production while tough conditions have led to a wellbelow-average harvest in the eastern states.
Released on November 21, the latest In Focus: Grain report, from NAB Agribusiness, shows that national wheat production has come back from the 17.4 million tonnes forecast last month to sit at 16.9 million tonnes.
NAB Agribusiness economist Phin Ziebell said state-by-state production varied greatly, with Western Australia streets ahead of other states.
‘‘We predict that Western Australia will produce 9.1 million tonnes of wheat this season, which is 108 per cent of the 10-year average of 8.4 million tonnes,’’ Mr Ziebell said.
‘‘At the same time, NSW will likely produce just over a quarter of its 10-year average, with only 2.1 million tonnes of wheat to be harvested.
‘‘South Australia and Victoria will see below-average harvests as well, producing 3 million tonnes and 2.4 million tonnes respectively.’’
Domestic grain prices remain at extreme levels compared to international benchmarks, and while ASX wheat has softened from a September peak near $450/tonne, any further reduction will depend heavily on seasonal conditions.
‘‘ASX wheat is currently trading at around $415/tonne,’’ Mr Ziebell said.
‘‘While this is still well above global benchmarks, if the kinder summer weather outlook for the eastern states eventuates we could see demand soften due to better summer crop and pasture availability.
‘‘On the other hand, if dry conditions persist then feed will be in even shorter supply and we could see many livestock producers moving to implement one-year feed plans.’’
Despite the Bureau of Meteorology slating a 70 per cent chance of an El Nin˜ o developing, the latest three-month outlook is looking more positive for NSW and parts of Victoria.
‘‘The latest BoM outlook shows a wetter-than-average period for much of NSW and parts of Victoria, which is very welcome given prolonged drought conditions in much of eastern Australia,’’ Mr Ziebell said.