Australia’s wheat harvest may be bigger than previously forecast as rain in the past month boosted the outlook for yields, according to National Australia Bank Ltd.
Output may total 21.6 million metric tons this season amid better conditions in New South Wales and South Australia, agribusiness economist Phin Ziebell wrote in a report on Thursday. The bank had previously warned that El Nino risked reducing the crop to 20 million tons or less. Timely rainfall in spring, which starts in September, may further boost production to about 23 million tons, the bank estimates.
Farmers and traders are assessing the impact of El Nino, which typically brings dry weather to eastern Australia and parts of Asia while altering rainfall in South America. The Pacific Ocean weather pattern continues to strengthen and will last into next year, Australia’s weather bureau predicts. The wheat crop is holding up better-than-expected as recent rainfall helped ease concerns El Nino would curb production, a survey of six analysts and traders compiled by Bloomberg shows.
“Australian wheat growers endured a somewhat nervous start to the planting season, with autumn rainfall patchy and below average in many regions,” Ziebell wrote in the report. “Better rainfall in the past month has improved confidence, but challenges remain, compounded by the presence of El Nino.”
Wet weather at the end of July and early this month has improved the outlook for wheat yields in Western Australia, the country’s top producer, the Australian Export Grain Innovation Centre said in a statement. Rain fell slowly over a number of days, replenishing dry soils and providing a reserve of moisture for crops to draw on, it said Thursday.
NAB’s forecast compares with 23.6 million tons estimated by the government in June and 23.7 million tons a year earlier. Western Australia’s crop may drop 4.5 percent from a year earlier to 8.5 million tons, NAB forecast. The harvest in New South Wales may decline 3.7 percent to 6.05 million tons. Australia is the world’s fifth-biggest wheat exporter and farmers begin harvesting from about October.
Wheat for September delivery lost 0.7 percent to $4.985 a bushel on the Chicago Board of Trade by 10:09 a.m. in Singapore.