Australia, the world’s fourth-largest wheat exporter, raised its production forecast as rain boosted output in parts of Western Australia, increasing the national harvest to the third-biggest on record.
Output may total 27 million metric tons in 2013-14 from 26.2 million tons estimated in December and 22.5 million tons a year earlier, the Australian Bureau of Agricultural and Resource Economics and Sciences said in a report today. The harvest, which was largely collected at the end of last year, compares with the record 29.9 million tons in 2011-12 and 27.4 million tons in 2010-11, according to bureau data.
Futures in Chicago tumbled 22 percent in 2013, the most since 2008, as bigger crops from Australia to Canada boosted global production to the highest ever. Rising grain supplies helped push world food prices to a 19-month low in January, according to the United Nations’ Food & Agriculture Organization. Total world grain output will be larger than previously expected at an all-time high of 2.502 billion tons, it said this month.
“While in aggregate it’s a large crop, there are parts of Australia that have not done so well,” said Peter Collins, manager of agricultural commodities at Canberra-based Abares. Central and northern parts of Western Australia had “spring rainfall that came just at the right time. It boosted crops, particularly in the central region, and that’s driven the increase in production in Western Australia.”
The country’s biggest grower may harvest 10.5 million tons, up from 9.6 million tons forecast in December, Abares said. Output in New South Wales, the second-biggest producer, will reach 6.6 million tons from 6.7 million tons estimated in December, the bureau said. Abares will release its first outlook for 2014-15 crop on March 4.
The U.S. Department of Agriculture cut its forecast for global supply yesterday. World reserves before the start of the Northern Hemisphere harvests will be 183.73 million tons, compared with 185.4 million tons estimated in January, even as global output reaches a record 711.89 million tons. Reserves in the U.S., the top exporter, will be 558 million bushels (15.2 million tons) on May 31, from 608 million forecast in January. Australia will produce 26.5 million tons, the USDA said.
Wheat for March delivery advanced 0.5 percent to $5.875 a bushel by 5:07 a.m. on the Chicago Board of Trade. Prices have rallied 6.8 percent since dropping to $5.50 on Jan. 29, the lowest since July 2010.
Australia’s canola production is forecast at 3.5 million tons from 3.4 million tons predicted in December, according to Abares. Barley output may total 9.5 million tons, up from a December estimate of 8.6 million tons, it said. Total winter- crop production, including wheat, barley and canola, is about 44 million tons, the second-largest on record, the bureau said.
Sorghum production may reach 1.3 million tons in 2013-14 from 1.6 million tons estimated in December and 2 million tons a year earlier, Abares said. That’s the smallest crop since at least 2006-07, bureau data show. The price of sorghum, used to feed livestock, climbed 7.5 percent this year as drought in Queensland curbed supply.