Wheat Crop Seen Falling Short in Australia on Frost, Hail DamagePhoebe Sedgman
Australia’s wheat harvest may drop short of a government forecast after frost and hail damaged crops in the world’s fifth-biggest shipper. Futures climbed to a six-week high.
Production may total 23.2 million metric tons in 2014-2015, according to the median of five analysts and trader estimates compiled by Bloomberg News. That compares with a government forecast of 24.2 million tons and 27 million tons a year earlier. Farmers started harvesting the crop this month.
Wheat futures in Chicago tumbled 12 percent this year on speculation farmers worldwide will reap record crops. Increased supplies of grains are helping to pressure global food prices, with a United Nations’ index dropping for a sixth month in September, the longest slide since 2009. Disappointing rain in winter and early spring across many Australian grain-growing regions as well as reports of frost damage are weighing on expected yields, according to National Australia Bank Ltd.
In Western Australia, “there’s hail damage and reports of several crops that have big losses in them and are basically lying down on the ground,” Graydon Chong, an analyst at Rabobank International, said by phone from Sydney. “We’ve had some isolated frost issues on the east coast. That will take a bit of the shine off the crop.”
Wheat futures advanced as much as 1.3 percent to $5.335 a bushel on the Chicago Board of Trade today, the highest level since Sept. 9. Prices dropped to $4.6625 on Sept. 25, the lowest since June 2010.
Southern grain regions in Western Australia, the country’s biggest wheat grower, received between 25 millimeters (1 inch) and 100 millimeters of rain in the week ended Oct. 21, according to the Bureau of Meteorology. Storms last weekend prompted the state’s fire and emergency services department to issue warnings for dangerous winds, large hail and flash flooding.
Cold weather in some eastern and southern areas may also curb yields. Severe frosts in early August caused considerable stem frost damage in South Australia and southern New South Wales and many paddocks were cut for hay, the Australian Export Grains Innovation Centre said Oct. 13, estimating national wheat output at 22 million tons to 22.3 million tons
Western Australia’s wheat harvest may total 8.4 million tons, the Australian Bureau of Agricultural and Resource Economics and Sciences said Sept. 9, maintaining a June forecast. Production in New South Wales, the country’s second-largest grower, is set to total 7.02 million tons from 7.25 million tons predicted in June, it said.
Below-average winter rainfall in parts of the Western Australian wheatbelt, as well as much of South Australia, northern Victoria and Southern New South Wales, combined with mixed spring conditions, contributed to a reduction in forecast yields, Phin Ziebell, an NAB agribusiness economist, said.
Global wheat production is set to reach a record 721.12 million tons, the U.S. Department of Agriculture said Oct. 10, forecasting Australia’s harvest at 25 million tons in 2014-2015.