THE NATIONAL Australia Bank (NAB) has issued a set of bullish numbers for Australian wheat production this year in its first estimates for the season, based on good opening conditions in Western Australia and the south-eastern cropping belt.
NAB agribusiness economist Phin Ziebell said with average growing conditions the bank predicted an Australian wheat crop of 26.1 million tonnes, more than 2mt over the average of around 24mt.
The NAB forecasts are made using the seasonal conditions at present combined with a range of historical rainfall data.
Mr Ziebell said the NAB had also run two other models, one for a La Niña season, associated with wetter than average conditions, and one for a wet season, with rainfall 20 per cent above average.
The La Niña season estimate is at 26.8mt, while the wet season estimate, which factors in rainfall slightly higher than that in the average La Niña year, is 27.1mt.
Mr Ziebell said even based on the average assessment, it would mean a year on year rise in wheat production in Australia of 10.7pc.
He said currently upside was limited by a dry northern cropping zone, but added with a wet winter forecast by the Bureau of Meteorology (BOM) there was the potential for things to turn around there still.
Mr Ziebell said opening conditions had been close to ideal in Western Australia, with heavy, early opening rains, while in Victoria, he said the situation had turned around amazingly over the past month.
"Following a dry year last year, Victorian growers were getting nervous, but May rainfall has been very good.
"Root zone soil moisture is currently average to above average across most of the wheat growing zone in southern NSW and Victoria."
Meanwhile, BOM climatologist Andrew Watkins said there had been a sharp change in climate drivers over the past month, as last year's El Niño event finally ended.
"We've seen sea surface temperatures in the Pacific drop by 0.7 degrees in the past month, which is huge."
He said the BOM currently had a La Niña watch in place in terms of its forecasts, but said there was a strong likelihood of this being upgraded to a La Niña alert in its next update should the climate drivers continue moving the way they are.
A potential La Niña, combined with a potential negative Indian Ocean Dipole (IOD), both consistent with above average rain, has led to the BOM issuing a staggering 80pc chance of above average June-August rainfall for much of southern and eastern Australia.
Dr Watkins said the last time there had been such a strong chance of above average rain was the summer of 2011-12.
The wet winter is likely to really kick into gear from July onwards.
"In general, falls are expected to be just on the wetter side of average in June, but we expect things to get damper from July onwards," Dr Watkins said.