Australian officials maintained an upbeat forecast for the country’s wheat exports besides cutting its estimate for the harvest by more than many investors had expected, and opening the way to further downgrades.
Abares, Australia’s official commodities bureau, cut by 932,000 tonnes to 24.467m tonnes its forecast for the country’s forthcoming wheat harvest, if still a result representing an 11% increase year on year.
The figure, to a level below some recent estimates, from the likes of the International Grains Council, Lanworth and Pentag Nidera, reflected “below-average rainfall since mid-winter” in parts of New South Wales, Queensland and Western Australia states.
“Seasonal conditions have been dry over large areas of the Western Australian cropping zone,” Abares said.
And the bureau cautioned that “given the hot and dry conditions experienced in some areas, sufficient and timely spring rainfall will be critical to realising” forecasts for winter crops such as wheat.
Luke Mathews at Commonwealth Bank of Australia said: “This means there is a distinct possibility of further downgrades to national winter grain production prospects.”
Nonetheless, Abares trimmed by only 100,000 tonnes, to 19.5m tonnes, its forecast for the country’s wheat exports in 2013-14, an estimate which would be one of the highest on record.
The estimate is higher than the 19.0m tonnes that the US Department of Agriculture foresees for Australia’s wheat exports, but lower than the 19.7m tonnes expected by the International Grains Council.
However, Australia is enjoying notably strong demand from China, whose own crop suffered harvest time rains, a dent in particular to quality.
The official China National Grain and Oils Information Centre crop bureau has suggested that Chinese imports of Australian wheat could total 3m-4m tonnes in 2013-14.
‘Sufficient and timely rainfall’
Abares also cautioned that the lack of rain was affecting areas growing summer crops, such as cotton and sorghum, warning that “sufficient and timely rainfall will be needed in the lead up to, and during, the planting window”.
It forecast declines in cotton and rice production, but an increase in sorghum output, by 17.4m tonnes to 2.02m tonnes, a grain which is also in demand from China.
Back among winter crops, Abares raised its forecast for the barley harvest by 256,000 tonnes to 7.673m tonnes, and its estimate of canola production by 80,000 tonnes to 3.31m tonnes, reflecting higher yield ideas.
However, Abares gave no reason for the upgrades, which prompted it to raise by 573,000 tonnes to 5.428m tonnes its forecast for barley exports in 2013-14, and by 90,000 tonnes to 2.48m tonnes its forecast for shipments of canola, the rapeseed variant.
(Source – http://www.agrimoney.com/news/australia-cuts-wheat-harvest-but-upbeat-on-exports–6254.html)