Wheat production in Australia, the world’s second-biggest shipper, will probably decline 28 percent to the lowest level in five years, missing a government estimate, after dry weather reduced yields.
The harvest will total 21.2 million metric tons in the 2012-2013 marketing year, according to the median of estimates from four analysts and two traders compiled by Bloomberg. That compares with 23.25 million tons in a survey last month and an official forecast of 22.5 million tons. The crop was a record 29.5 million tons last year.
Wheat climbed 33 percent this year as dry weather in parts of the European Union and Russia cut global stockpiles to the lowest in four years, helping boost food costs 7.7 percent the past three months. The U.S. Department of Agriculture cut its estimate for Australian output 12 percent to 23 million tons on Oct. 11. That may be lowered by 2 million tons in coming reports because of dry conditions, said Rabobank International.
“Western Australia had a very prolonged dry stretch through the cropping year,” said David Johnson, general manager of risk and pricing at Emerald Group Australia Pty in Melbourne. Eastern Australia “hasn’t been getting convincing rain to be able to fulfill crop potential, so the crop has just been slowly declining.”
The Australian Bureau of Agricultural and Resource Economics and Sciences, or Abares, will revise its estimate in December.
Wheat for delivery in December declined 0.9 percent to $8.70 a bushel on the Chicago Board of Trade at 4:41 p.m. in Singapore. Futures rose 0.7 percent yesterday, advancing for the fourth straight session. The grain is the best performer this year on the Standard & Poor’s GSCI Spot Index of 24 commodities.
CBH Group, Western Australia’s top grain handler, said Oct. 3 it expects to receive from the region between 9.1 million tons and 9.3 million tons this harvest, down from a record 15 million tons last year, after a dry July and August. That compares with its prediction of 9 million tons to 10 million tons on Sept. 5.
Western Australia’s southwest had the driest July on record while the state had below-average rainfall in August and near-average rain in September, according to the Bureau of Meteorology. Wheat output in the nation’s biggest producer may drop 39 percent to 7.1 million tons, according to Abares.
“The crop has been really under pressure the whole way through,” Emerald’s Johnson said by phone Oct. 19. The east coast is set for an average year, he said.
Global stockpiles will be 173 million tons on May 31, down from a previous estimate of 176.71 million, the USDA said Oct. 11. World output was forecast at 653.05 million tons, down 0.9 percent from the prediction a month earlier, it said.