Australia Raises Wheat Crop Estimate as Grain Quality Slips

  • Quality good in Victoria, inconsistent across other states
  • Barley output seen higher, most fails to meet malting grade

Australia increased its wheat crop estimate after farmers in the world’s fifth-biggest exporter completed harvesting.

Output totaled 24.2 million metric tons in 2015-16, the Australian Bureau of Agricultural & Resource Economics & Sciences said in a report on Tuesday. That compares with 24 million tons forecast in December and 23.1 million tons a year earlier, bureau data show.

Variable and unfavorable seasonal conditions in Western Australia and South Australia increased the rate of so-called screenings -- small grains that pass through a sieve -- a mark of lower crop quality. The outlook for production was clouded by the hot and dry weather linked to El Nino weather that coincided with rain and wind in November and bushfires in parts of the country’s west and south.

“Wheat quality was generally good in Victoria but inconsistent in the other states,” Canberra-based Abares said in the report. In Western Australia, “wheat protein levels were around average but high rates of screenings resulted in a higher than average proportion of the crop being graded as general purpose.”

In December, Australia cut its production estimate 5.1 percent citing hot and dry weather linked to El Nino. The event, which brings drier weather to eastern Australia in spring and parches Asia, will probably rank among the three strongest since 1950. Wheat futures in Chicago fell for a third year in 2015 amid expectations global inventories will climb to a record.

Canola, Barley

Western Australia’s wheat crop, the country’s biggest, totaled 8.8 million tons compared with 8.7 million tons estimated in December, Abares said. Farmers in New South Wales, the second-biggest producer, harvested 7.5 million tons compared with 7.1 million tons forecast in December, the bureau said.

Nationwide canola production reached 2.95 million tons, compared with 3 million tons predicted in December. Barley output may total 8.5 million tons from 8.2 million tons previously forecast. Most barley failed to meet malting grade as unfavorable conditions affected grain quality, Abares said in the report.

Cotton production may total 546,000 tons in 2015-16 compared with a prior estimate of 560,000 tons. Rice production is forecast at 305,000 tons, unchanged from the December prediction and 58 percent less than a year earlier, amid reduced availability of irrigation water.

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