AUSTRALIA is likely to experience one of the most mixed winter crop harvests in years, with WA on track for above average wheat production while tough conditions have led to a well below average harvest in the Eastern States.
Released last week, 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 16.9mt.
NAB agribusiness economist Phin Ziebell said State-by-State production varied greatly, with WA ahead of other States,
“We predict that Western Australia will produce 9.1mt 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, New South Wales will likely produce just over a quarter of its10-year average, with only 2.1mt of wheat to be harvested.
“South Australia and Victoria will see below average harvests as well, producing 3.0mt and 2.4mt respectively.”
Domestic grain prices remain at extreme levels compared to international benchmarks, and while ASX wheat has softened from a September peak near $450 tonnes, any further reduction will depend heavily on seasonal conditions.
“ASX wheat is trading at about $415/t,” 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.
Mr Ziebell said on the other hand, if dry conditions persisted then feed would be in even shorter supply and there would see many livestock producers moving to implement one-year feed plans.”
Despite the Bureau of Meteorology (BoM) slating a 70pc chance of a El Nino developing, the latest three month outlook is looking more positive for New South Wales and parts of Victoria.
“The latest BoM outlook shows a wetter than average period for much of New South Wales and parts of Victoria, which is very welcome given prolonged drought conditions in much of eastern Australia,” Mr Ziebell said.
“Despite some areas receiving good falls in October and early November, which created a potential upside for pasture and dry land summer crop prospects, this rain came too late for many winter crops.
“Victoria and South Australia are a mixed bag with some parts remaining very dry while others, like south-west Victoria, are enjoying a good season.
“Western Australia is still the pick of the bunch as far as seasonal conditions are concerned.”