Grain-growing regions in eastern parts of Australia, the third-biggest exporter, are set for a wetter-than-normal three-month period, boosting optimism output will rebound after dry weather hurt crops last year.
The chance of exceeding median rainfall for July to September is more than 60 percent over most of mainland Australia, except for parts of the coast of Western Australia, the Bureau of Meteorology said today. Parts of northern Victoria and southern New South Wales, last year’s biggest wheat grower, have a more than 80 percent chance of a wetter three-month period, it said.
Australia increased its harvest estimate last week, forecasting a 15 percent gain in wheat production this year after rains boosted soil moisture. Wheat has tumbled 11 percent this year, joining corn and soybeans in bear markets, as farmers worldwide boost production. The downside potential for crop prices is the biggest trading opportunity across commodity markets, Goldman Sachs Group Inc. says.
“Most of the country has had a pretty good start,” said Graydon Chong, a grains and oilseed analyst at Rabobank International in Sydney. “These rains, if we get consistent rains throughout spring, will set us up for a pretty good harvest.”
Australia may produce 25.4 million metric tons of wheat in 2013-2014, the Australian Bureau of Agricultural and Resource Economics and Sciences said June 12. That compares with 24.9 million tons forecast in March and 22.1 million tons a year earlier, it said. The U.S. is set to be the world’s largest wheat exporter in 2012-2013 followed by the European Union and Australia, according to the U.S. Department of Agriculture.
Farmers worldwide will harvest 695.9 million tons in 2013-2014 from 655.6 million tons a year earlier, the USDA said June 12. A 6.6 percent increase in output from Canada and gains of 43 percent in Russia and 24 percent in Ukraine will counter an 8.3 percent drop in the U.S., the agency forecasts.