AUSTRALIA is laying the groundwork for a third consecutive bumper harvest, with this year's total planted crop area forecast to reach a record 23.83 million hectares, according to Rabobank's just released 2022/23 Winter Crop Outlook.
This would be nearly one per cent up on last year's record planting and 11pc above the five-year average.
It includes a 1.4pc lift in wheat and a record canola planting, up 20.9pc on last year, albeit at the expense of barley, oats and pulses.
The specialist agribusiness bank said in a year of global shortages and high commodity prices, the forecast record planting came as global markets look to Australia to deliver a "hat-trick of great grain and oilseed production" at a time when poor production and export constraints in some countries are prompting the United Nations to warn that the world is on the brink of a food crisis.
Locally, the bank said "hopes are on" another large winter crop to allow Australian farmers to secure good margins in the face of high costs for inputs including fertiliser, fuel, freight and agrochemicals.
Across the States, winter plantings are forecast to be up on last year by 10pc in Victoria and 8pc in Queensland.
While New South Wales, South Australia and Western Australia are expected to see small contractions in planted area of 2pc, 1pc and 1pc respectively.
The forecast record national winter crop planting should see Australia on track to deliver another above-average grain harvest this season.
Report co-author, RaboResearch agricultural analyst Dennis Voznesenski said it was too early in the season to tell if the record planting would deliver another production record this year.
"Until the crop is more progressed and we can see if there are any surprises in store, we have been conservative in our production volume estimates,'' Mr Voznesenski said.
Based on current plantings and slightly above-average yield expectations, the bank estimates Australia will be on track to deliver total wheat production of 32.5 million tonnes (down 10pc on last year), barley of 11mt (down 18pc) and canola of 5.8mt (down 9pc).
Export program outlook
Australia will have "well above-average export potential again in 2022/23", the outlook said.
Report co-author, RaboResearch senior commodities analyst Cheryl Kalisch Gordon said a prospective third consecutive bumper harvest would mean Australia would be "well placed to help support global wheat needs in 2022/23".
"We expect Australia could export about 26mt of wheat again in 2022/23, almost 50pc above the 10-year average and more than 50pc above the five-year average," Dr Kalisch Gordon said.
Rabobank said Australia was also forecast to deliver an impressive barley and canola export program in 2022/23, albeit down on last year.
The bank sees barley exports of 7.5mt (down 16pc) and canola exports at 4.5mt (down 6pc).
Rabobank said global stocks of grains and oilseeds are set to remain low and move lower in the coming year, supporting elevated global prices through 2022/23.
"2022/23 may be the first season in nine years in which global consumption of grain declines on the previous year - due to the high prices and limited supply," Mr Voznesenski said.
"But even a decline in consumption won't stop global stocks of wheat and most coarse grains from falling to their lowest levels since 2015/16."
The bank expects global wheat prices to continue trading near current levels with Chicago Board of Trade wheat to trade about 1100 US cents per bushel out to the first half of 2023.
Strong demand for feed barley as a substitute for high-priced wheat and corn feed should keep global barley consumption near or above last year's levels and be supportive of global prices, Rabobank said.
Canola prices are also expected to remain strong.
Local prices for wheat, barley and canola are expected to remain historically strong, albeit continuing to trade at a discount to global levels.
Domestically, the bank expects Australian premium white (APW) wheat track prices to trade at an average above $400/t over the balance of the year.
Local feed barley prices are forecast to trade between $415/t and $354/t over the next 12 months, while local canola prices are forecast to range from $938-$805/t over the course of 2022/23.
Dr Kalisch Gordon said if Australia had another record harvest, "we could see a situation of full bulk handler sites, full onfarm storage and large volumes of grain in silo bags on farm awaiting shipping slots''.
"This could significantly weigh on prices, especially if conditions are very wet and farmers need to move grain off farm," she said.
When it comes to farm inputs, prices for most are believed to have peaked, but are expected to remain elevated due to the high cost of production and freight, as well as the sanctions on Russia and Belarus, according to the Rabobank outlook.
Mr Voznesenski said after peaking in mid-March, a decline seen in global urea prices was expected to flow into local Australian markets in late July/early August, though prices would remain volatile.
He said the bank's survey had indicated many farmers were already well prepared when it comes to farm inputs.
Sign up for our newsletter to stay up to date.