Australia, the world’s second-biggest wheat exporter, cut its harvest forecast as dry weather in the country’s west curbs production, deepening global supply concerns as droughts bake fields from the U.S. to Russia.
Output may reach 22.5 million metric tons in 2012-2013, 6.6 percent below an estimate in June, the Australian Bureau of Agricultural and Resource Economics and Sciences, or Abares, said today. The crop was a record 29.5 million tons in 2011-2012. The agency raised its export estimate to 21.5 million tons in the year from Oct. 1, from 20.5 million tons forecast in June and a revised record 24.5 million tons a year earlier, it said.
Wheat has climbed 36 percent this year as the worst U.S. drought since 1956 and dry weather in Russia shrinks supplies. World food prices were little changed last month after the biggest jump since 2009 in July as grain and oilseed prices rose, the Food & Agriculture Organization said Sept. 6. World reserves before next year’s Northern Hemisphere harvest may drop 10 percent to the lowest since 2009, U.S. government data show
“Importers around the world are looking to Australia to provide a significant quantity of wheat over the next 12 months and that’s a direct consequence of drought in Russia and the U.S.,” said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia. “Although Abares is projecting quite a significant year-on-year decline in wheat production, total supplies are sufficient to allow a very strong export program.”
Wheat for December delivery fell as much as 0.5 percent to $8.8525 a bushel on the Chicago Board of Trade and was at $8.8625 at 11:11 a.m. in Singapore. Futures reached $9.4725 on July 23, the most expensive in four years.
The area planted to wheat in Australia may total 13.3 million hectares (33 million acres), from 13.4 million hectares estimated in June, the bureau said in today’s report.
Wheat output in Western Australia, typically the biggest producer, may drop to 7.1 million tons from 8.7 million tons estimated in June and 39 percent below last year’s crop, according to Abares. Production in New South Wales may total 7.1 million tons, up from 6.9 million tons forecast in June, it said.
Western Australia’s southwest had the driest July on record and the state’s mean minimum temperature was the coldest since at least 1950, when comparable records began, according to the Bureau of Meteorology. An improved rainfall outlook from September to November is not expected to significantly improve yields given the late stage of crop development, Abares said.
The country’s canola production is forecast at 2.76 million tons, down from 2.94 million tons forecast in June, Canberra-based Abares said. The bureau cut its forecast for barley output to 6.96 million tons from 7.3 million tons estimated in June.
Total winter-crop output -- including wheat, barley and canola -- may be 36.2 million tons in 2012-2013, compared with 45.3 million tons a year earlier, it said.
Cotton production in Australia, set to be the second-biggest exporter, may total 991,000 tons compared with 1.05 million tons forecast in June as farmers plant a smaller dryland crop amid lower prices, the bureau said. The harvest was a revised record of 1.07 million tons a year earlier.
Cotton has tumbled 18 percent this year, the second-biggest decline among the 24 commodities tracked by the Standard & Poor’s GSCI Spot Index, after record prices spurred output. The area sown to dryland cotton in Australia may decline 30 percent in 2012-2013 on concern the growing season may be dry and as lower prices cut margins, Rabobank Group said in a report today.
The U.S. is set to be the world’s biggest exporter of both cotton and wheat in 2012-2013, followed by Australia, according to the U.S. Department of Agriculture. The agency will update production and export estimates tomorrow.