April 23 (Bloomberg) -- Australia, last year’s second-biggest wheat exporter, is set for wetter-than-normal weather in the next three months in parts of the country’s east, easing concern that dry conditions may curb production.
The chances of above-median rainfall from May to July is between 60 percent and 80 percent over southern Queensland and northern New South Wales, last year’s biggest wheat-producing state, the Bureau of Meteorology said on its website today. Most of Victoria and southeast South Australia have a 60 percent to 70 percent chance of below-normal rain in the period, the bureau said. Eastern Australia accounted for about 52 percent of last year’s wheat harvest.
Australia’s wheat output may gain 13 percent this year to 24.9 million metric tons, according to the Australian Bureau of Agricultural and Resource Economics and Sciences. Farmers begin planting around the end of this month. The U.S. government estimates global supplies will drop to the smallest in four years. Farmers in the U.S., the top exporter, probably will abandon 25 percent of their hard-red winter wheat, according to the average of 11 analyst estimates compiled by Bloomberg.
“Much more rainfall is needed to ensure favorable seeding conditions across the eastern states,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, wrote in a report today. “The lack of soil moisture means canola planted area will be pared back, and if it stays dry for another month wheat acres might also be switched into barley.”
Western Australia, which dropped to the country’s second-biggest wheat producer last harvest, has an equal chance of above- or below-average rainfall, the weather bureau said. The state’s southwest, the main producing region, had above-average rainfall through summer and in March, the bureau said.
Western Australia’s planting outlook is “promising” following good summer and autumn rainfall, according to Mathews. Wheat for July delivery dropped 0.5 percent to $6.9925 a bushel on the Chicago Board of Trade at 2:50 p.m. in Singapore.
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