Wheat exports from Australia, set to be the world’s second-biggest shipper, may advance to a record this year as the harvest climbs to an all-time high after favorable weather, according to the government forecaster.
Shipments may total 22.3 million metric tons in the year to Sept. 30, the Australian Bureau of Agricultural Resource Economics and Sciences said today. That’s 3.2 percent more than forecast on Dec. 6 and 20 percent higher than a year earlier. Production may total 29.5 million tons, 4.3 percent more than previously estimated and beating last year’s record crop of 27.9 million tons, the bureau said in a report.
Increased shipments from Australia will add to record worldwide supply and may help to extend the grain’s 29 percent slump in the past year, easing global food costs. Wheat may underperform corn and soybeans, Morgan Stanley said in a report yesterday, citing “flush supplies” from Australia and Europe.
“The market may be a bit surprised by the number,” David Johnson, general manager of risk and pricing at Emerald Group Australia Pty, said by phone from Melbourne, referring to the bureau’s increased forecast for overseas shipments.
Wheat for May delivery fell 0.7 percent to $6.4225 per bushel on the Chicago Board of Trade at 5:48 p.m. in Singapore. The price fell 4.7 percent last week as forecasts for rising world output and stockpiles countered concern that dry weather and freezing temperatures in Eastern Europe may have hurt crops.
“Australia will continue to have to price wheat as a feed grain into certain markets to achieve that export volume,” Johnson said, citing Indonesia, the Philippines and Japan. Feed wheat is of lower quality than the grain for human consumption.
Wheat-production estimates for the U.S. in 2012-2013 may be revised higher should improvements in the weather be sustained, according to the Morgan Stanley report. Corn may rise 9 percent in six months, outpacing increases in other commodities, as stockpiles in the U.S., the largest grower and exporter, tighten further, Goldman Sachs Group Inc. said on Feb. 9.
Global wheat stockpiles before the 2012 Northern Hemisphere harvest will climb to a record 213.1 million tons, 6.2 percent more than last year, the U.S. Department of Agriculture said on Feb. 9, predicting that the U.S. would be the largest exporter in 2011-2012, followed by Australia and Russia. The Australian export estimate is 1.3 million tons higher than the USDA figure.
Global food costs, which rebounded 1.9 percent last month as grain, dairy and oilseed costs increased, have dropped 9.9 percent from a record last February, according to data from the United Nations’ Food & Agriculture Organization. Wheat’s tumble over the past year has exceeded the 9.3 percent decline in corn and 11 percent loss in soybean futures in Chicago.
“Growing conditions for winter crops were generally favorable across Australia,” the bureau said in the report. “Western Australia experienced a recovery from very dry conditions last season and the eastern states experienced a second successive season of favorable conditions.”
Wheat output in Western Australia, set to be the nation’s biggest producer, may total 11.7 million tons, more than double last year’s crop and 16 percent higher than the December estimate, according to the bureau’s report. The total winter-crop harvest in Australia, including wheat, barley, canola and other grains, may be a record 45.4 million tons, the bureau said.