Wheat Estimate Cut by Australia as Dry Weather Curbs Harvest

Australia reduced its wheat production forecast after dry weather in the biggest producing states harmed crops, curbing supplies available for export from the world’s third-biggest shipper.

Farmers are set to harvest 24.5 million metric tons of wheat in 2013-2014 from 25.4 million tons estimated in June and 22.1 million tons a year earlier, the Australian Bureau of Agricultural and Resource Economics and Sciences said in a report today. Exports may reach 19.5 million tons in the year starting Oct. 1 from 19.6 million tons predicted in June and 19.8 million tons a year earlier, it said.

Wheat lost 18 percent this year on expectations increased production in Canada and Russia will boost global output to a record. World food prices fell for a fourth month in August to the lowest level in more than a year on lower grain prices as corn slumped 34 percent this year and soybeans lost 4.7 percent, according to the United Nations. A smaller Australian crop is “a major risk for the world” and fewer exports may help push prices higher, according to Macquarie Group Ltd.

“Below average rainfall since mid-winter in parts of New South Wales, Queensland and the northern growing areas of Western Australia has adversely affected crop development,” the bureau’s executive director Paul Morris said in a statement. “Temperatures and rainfall have generally been favorable in South Australia, Victoria and the southern parts of Western Australia.”

Western Australian growers will collect 7.3 million tons in 2013-2014 compared with 8.8 million tons forecast in June, the bureau said. That will still put the state ahead of last year’s top producer New South Wales, which will harvest 7.2 million tons from 7.6 million tons estimated in June, it said.

Abares raised its area planted to wheat to 13.71 million hectares (33.9 million acres) from 13.68 million hectares estimated in June. Australia’s canola production is forecast at 3.3 million tons from 3.2 million tons projected in June, the bureau said. Barley output is expected to total 7.7 million tons, up from a June estimate of 7.4 million tons, it said.

To contact the reporter on this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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