May 7 (Bloomberg) -- Grain growers in Western Australia, the country’s second-biggest wheat producer last year, are set to receive “critical” rain, boosting the outlook for crops being planted into dry soil, according to CBH Group.
“We’re hoping to get 10 millimeters to 15 millimeters,” Colin Tutt, general manager operations at the state’s biggest grain handler, said by phone from Perth. “That will allow us to get a fair bit of crop in.”
Wheat climbed 6.3 percent in April, the best month since July, on concern freezing weather may cut production in the U.S., the biggest exporter. Western Australia’s wheat output slumped 38 percent last harvest after dry weather curbed yields, according to the Australian Bureau of Agricultural and Resource Economics and Sciences, or Abares. Parts of the state’s southwest may get as much as 25 millimeters (0.98 inches) in the four days to May 10, according to the Bureau of Meteorology.
“We’ve progressed reasonably well, although moisture is a bit of an issue,” Tutt said. “Tonight’s rain is critical.”
New South Wales overtook Western Australia as the country’s largest wheat producer last year after production dropped to 6.9 million metric tons from 11 million tons, according to Canberra-based Abares. The state’s southwest, the main grain-growing region, had below-average rainfall in April after above-average rain in summer, according to the weather bureau.
The area planted may total 6.5 million hectares (16 million acres) to 6.8 million hectares this year, a decline of about 100,000 to 200,000 hectares from a year earlier, as some farmers face financing difficulties, according to Tutt. “If we can get this rain tonight, we might see finances a bit freer and more crops go into the ground,” he said.
Production in Australia’s east may decline if dry weather continues, according to Emerald Group Australia Pty. Inland New South Wales had little rain in April and Victoria, the fourth-largest wheat grower last year, received much less than usual, according to the weather bureau.
“We haven’t seen any tangible reduction yet in planting intentions, but the stress is there,” said Brian Dalitz, general manager of trading and marketing at the Melbourne-based grain handler. “If we get to the first half of June without some rain on the ground or a conducive forecast, we’ll start to lose some acres.”
No significant rainfall is forecast for New South Wales and Victoria to May 10, according to the Bureau of Meteorology. Australia’s wheat production may climb 13 percent to 24.9 million tons this harvest on an increase in area, Abares forecast in March.
Wheat for delivery in July rose as much as 0.8 percent to $7.085 a bushel on the Chicago Board of Trade today after Department of Agriculture data showed winter-crop conditions worsened in the U.S. and planting of the spring-variety lagged behind last year’s pace.
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