Australia’s wheat crop followed France’s in receiving two upgrades in one day, as worst fears over weather setbacks prompted by El Nino recede, although some concerns remain over regional dryness.
Pentag Nidera, the Queensland-based broker, raised to “potentially exceeding 24m tonnes”, from 22m-23m tonnes, its forecast for the Australian wheat crop to be harvested later this year, citing “beneficial rainfall” despite the El Nino, which has a record of bringing dryness in particular to eastern areas.
While the broker said that “the active El Nino event continues to threaten” crop prospects, “to date precipitation events have been timely and many crops have excellent yield potential”.
Recent rains have “moved Australia to a position where most winter crops are currently in great shape.
“The outlook for the 2015 season looks better today than it did three weeks ago.”
Separately, National Australia Bank, which had forecast the potential for a sub-20m-tonne crop, said that “better conditions” in New South Wales and South Australia currently suggested a harvest of 21.6m tonnes.
And “timely spring rains should push yields higher and could precipitate a national harvest of around 23m tonnes”, the bank said.
With US Department of Agriculture staff in Canberra last week foreseeing a 25.0m-tonne harvest, 1.0m tonnes below the USDA’s official estimate, forecasts are converging around the 23.6m tonnes expected by Abares, the official Australian crop bureau, in line with last year’s result.
Thursday’s upgrades also represent the latest in a series from private forecasters for major wheat crops, with Russia’s prospects lifted earlier this week by SovEcon, and the French harvest (the European Union’s biggest) pegged on Wednesday at record highs by both Agritel and ODA.
Late last month, CWB lifted its estimate for the dryness-tested Canadian crop.
However, some uncertainties remain in Australia, where harvest will not begin until October, with Tobin Gorey at Commonwealth Bank of Australia on Wednesday highlighting to Agrimoney.com the importance of “finishing rains”, with crops needing further moisture for grain fill.
National Australia Bank noted that Victoria received “generally below-average autumn and early winter rainfall”, with long-term forecasts suggesting a continued shortfall.
The bank forecast the state’s wheat crops tumbling 23% to 2.11m tonnes.
Pentag Nidera added that “production potential across most crops in Victoria continues to be limited by lack of precipitation.
“The Wimmera in particular has had very little in crop rain and unfortunately there is no relief on the forecast.”
‘Severe moisture stress’
Pentag also said that in central areas of its native Queensland “most of the Central Queensland wheat crop is suffering from severe moisture stress”, although some other seedings were holding up better.
“The chickpea crop was sown very deep and into moisture and these crops are hanging on remarkably well, however need follow up rain to achieve their yield potential,” the broker said.
CBA’s Tobin Gorey noted forecasts for “further light rainfall starting late today or Friday in Western Australia’s winter crop regions Friday and continuing into the weekend.
However, while the rains are forecast to “move across southern grain areas”, they are seen “likely to come to a halt in southern New South Wales and not progress further north”.
In Sydney, January wheat futures closed up Aus$3.00 at Aus$301.00 a tonne overnight, after a strong performance by Chicago futures, the world benchmark, in the last session.