Australian officials hiked their estimate for the country’s wheat, barley and canola harvests, citing “favourable seasonal conditions”, and expectations for further rainfall, despite the strengthened El Nino.
The Abares commodities bureau ditched expectations of a drop in Australian wheat output this year, raising its production forecast by 1.69m tonnes to 25.28m tonnes.
The revised estimate, which compares with output of 23.67m tonnes last year, was attributed to “timely rainfall events” in Western Australia and South Australia over the winter, and “above-average” rains in New South Wales, despite the onset of El Nino.
The weather pattern – of which the current event was rated by the Australian Bureau of Meteorology last week as the strongest since 1997-98 – has a history of causing dry weather in eastern Australia.
However, “the outlook for spring rainfall is favourable for most cropping regions in Australia”, Abares said, noting bureau expectations that” wetter-than-average conditions were likely in most cropping regions in New South Wales, Victoria, South Australia and Western Australia”.
Abares vs USDA
Karen Schneider, the Abares executive director, said that expectations for output of winter crops have “been revised up for all major producing states, although forecast production in Victoria is expected to be below-average”.
For barley, the bureau raised its estimate by 374,000 tonnes to 8.62m tonnes, and for canola by 188,000 tonnes to 3.15m tonnes.
However, the upgraded estimates have already been anticipated by some other observers, with the International Grains Council, for instance, already estimating Australia’s wheat crop at 25.5m tonnes, with the barley harvest pegged at 8.5m tonnes and canola crop at 3.0m tonnes.
The US Department of Agriculture, which will update its world crop estimates on Friday, already has Australia down for a 26.0m-tonne wheat crop, 8.7m-tonne barley harvest and for 3.3m tonnes in canola output.
One crop where output may far exceed market expectations is in chickpeas, for which Australian output is expected to soar 78% to 990,000 tonnes, which would be the highest in at least a decade.
Grain trader Pentag Nidera two weeks said that Australia’s chickpea harvest could hit 750,000-900,000 tonnes.
“Strong demand from India for chickpeas had led to an expected increase in production,” Ms Schneider said, with the country’s own harvest this year undermined by a double whammy of poor weather and depressing plantings.
Among summer crops, Abares also forecast a small drop, of 75,000 tonnes to 2.03m tonnes, in Australia’s next sorghum harvest, which will not be harvested until 2016.
The estimate foresees sowings remaining at 651,000 hectares, but yield easing a little from this year’s elevated level.
Sorghum has gained a higher profile in Australia, and the US, with a jump in China’s import needs, although a move by Beijing to raise scrutiny over the buy-ins has raised some market jitters over futures prospects.
(Source – http://www.agrimoney.com/news/australia-lifts-wheat-canola-hopes-amid-favourable-weather–8740.html)