Wheat production in Australia, the world’s third-biggest exporter, is set to increase from a year earlier after rain in May and June boosted crop prospects, according to National Australia Bank Ltd.
Output may reach 24 million metric tons in 2013-2014, the bank said in a report today. That compares with 25.4 million tons estimated last month by the Australian Bureau of Agricultural and Resource Economics and Sciences and a harvest of 22.1 million tons a year earlier. Exports may drop to 15.8 million tons in 2013-2014, from a government estimate of 20.1 million tons a year earlier, NAB said.
World wheat prices that surged last year as drought cut output, fell to the lowest since June 2012 this week on expectations global grains output will rebound. Global wheat output will climb 6.1 percent as bigger harvests in Australia and Canada counter a smaller U.S. crop, the U.S. Department of Agriculture forecasts. Most of Australia is set for a wetter- than-normal July-to-September, the Bureau of Meteorology says.
“Some decent rainfall in May and the first couple of weeks in June proved to be the saving grace,” the report said. “The large drawdowns on inventories last season, which have offered support to exports, have resulted in an unsustainably low carry-in stock.”
So-called beginning stockpiles in Australia dropped to 3.42 million tons in 2013-2014, 52 percent lower than the year before and the smallest since 2009-2010, according to data from the U.S. Department of Agriculture.
Australia’s output climbed to a record 29.9 million tons in 2011-2012, boosting exports to an all-time high, according to Canberra-based Abares. Exports are set to decline 18 percent to 20.1 million tons in the year ending Sept. 30 and fall to 19.6 million tons in the year starting Oct. 1, it said last month.
Australia may face increased export competition from the Black Sea region and Canada, potentially resulting in cancellations of cargoes from Australia, NAB said.