Wheat Crop in West Australia Needs Rain, Group Says
Wheat crops in Western Australia, the country’s largest-growing state, are in urgent need of rain and forecast output will likely be cut next month if a dry weather pattern continues, an industry group said.
Output is estimated at 5.5 million metric tons, the Grain Industry Association of Western Australia said in a report e- mailed today and dated Aug. 12. Output last year was 8.2 million tons, according to the federal government’s commodity forecaster.
Dry weather is cutting output forecasts in the west, while above-average rainfall has boosted yield potential in eastern states, likely boosting Australia’s overall harvest. Futures in Chicago touched their highest in almost two years earlier this month after Russia banned wheat exports, tightening global supplies. Ukraine said yesterday it planned to curb shipments.
“We need rain to start coming down soon to maintain at least the potential that we have forecast so far,” Alan Meldrum, a project manager at the association, said by phone today. The majority of paddocks had no subsoil moisture and required a wet spring, the association’s report said.
December-delivery wheat added as much as 1.3 percent to $6.9275 a bushel on the Chicago Board of Trade before trading at $6.9075 at 5:23 p.m. in Singapore. The price touched $8.68 on Aug. 6. Australia was the fourth-largest wheat exporter in 2009- 2010, according to the U.S. Department of Agriculture.
Favorable Outlook
Rabobank agricultural commodities analyst Wayne Gordon said the bank may revise upward its 21.8 million-ton forecast for the Australian crop on the favorable outlook in the eastern states even as farmers prepared to tackle a possible locust plague.
“Everything is pointing to a very significant production event in the east coast,” he said. The bank cut its Western Australian forecast to 6.3 million tons from 7.5 million Aug. 9.
A La Nina event, which typically brings above-average rainfall to the country’s east, was likely to persist until at least the end of this year, the Bureau of Meteorology said today.
Australian wheat production was forecast at 23 million tons by the USDA on Aug. 12, higher than its July estimate of 22 million tons.
Locust-control measures were likely to minimize potential damage from the insects, which could range from 1 million tons to 4 million tons in an extreme scenario where the outbreak wasn’t contained, Gordon said.
“The risk of the outbreak having severe damage is lower simply because there is that element of preparedness which perhaps hasn’t been there when we have had previous outbreaks,” he said.
Biosecurity Queensland had begun spraying spur-throated locusts in the state’s west, Primary Industries Minister Tim Mulherin said in a statement today. Hatchings of plague locusts are mostly forecast from August to October.
“If crops are to reach their potential this year it will take a united effort from farmers and the wider community to fight the locust threat,” Victorian Agriculture Minister Joe Helper said yesterday in a statement.
To contact the reporter on this story: Wendy Pugh in Melbourne wpugh@bloomberg.net.
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
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