BRIGHT starts to the cropping season in south-eastern and south-western Australia have defied the gloomy climate forecast for a markedly drier than average season.
Both the National Australia Bank (NAB) and Rural Bank have noted the excellent early break, with NAB senior agribusiness economist Phin Ziebell saying it was an ideal start to the winter cropping season in many areas.
Mr Ziebell, said farmers planting winter crops found themselves in a far better position than would have been expected given the climate outlook issued last month.
"This is a result of good rainfall across south-west Western Australia, Victoria, South Australia and parts of New South Wales," he said.
"While the outlook remains dry, producers will have confidence going into planting."
He cautioned total production was likely to be well below last year's record 67.3 million tonne winter crp.
"Yields are likely to be below last year's record conditions, with the dry outlook and El Nino potential key risks."
Mr Ziebell said at present the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) had early forecasts of a 28.2 million tonne wheat crop, 9.9m tonnes barley production and 5.4m tonnes of canola.
Sean Hickey, Rural Bank agricultural analyst, said it had been an unexpected bonus to get such a good start to the season.
"None of the weather outlooks were talking up good autumn rain and yet we've ended up with near ideal sowing conditions in many regions," he said.
"Earlier sown crop is now germinated and growing well through many southern regions while soil temperatures are still warm which is a good result, so even though it is drying up and planting is slowing somewhat it has been a good start."
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"Should it continue to stay dry through May we could see some farmers who did not get all their canola in potential shift to shorter season cereal crops."
In the north he said many farmers were still waiting for an opening rain but were relatively comfortable knowing the soil moisture profile is full.
"Through northern NSW and Queensland they would definitely like a rain to get things started but they are also relatively optimistic given the stored moisture."
On the pricing front Mr Hickey said there had been a decline in wheat values due to better northern hemisphere crop condition and Canada's biggest wheat plant in over 20 years, with US futures falling a hefty $A34 a tonne over the past month, compared to Aussie cash price falls of around $10-20/t.
"There have been recent upgrades in the US winter wheat crop ratings and a forecast 22-year high in Canadian wheat planted area."
On the flip side, he said the ongoing volatility in Ukraine meant a sudden jump in values due to supply issues was a possibility.
In terms of Australian crop composition Mr Hickey said he expected the combination of a drier than average growing season and positive news regarding China potentially ending its tariffs on barley as positive for that crop.
However, he said farmers were likely to stick to their fixed rotations.
"The China news was probably too late, we may see some additional barley go in but it is unlikely to be a massive swing."
"Canola is likely to come back a little based on the outlook for drier conditions, higher input prices and big plants of the crop in recent years meaning people are looking to rotate."
Mr Hickey said there continued to be red-hot demand for Aussie grain.
"Australian Bureau of Statistics data shows wheat and canola exports are at record pace to the end of February."
"China remains Australia's largest consumer of wheat with 26 per cent of market share and they are on target to import over 7m tonnes of Australian wheat this season.
"Traditional Asian destinations in Indonesia, Japan, and Philippines are also strong buyers."