Wheat production in Australia will increase as acreage expands and yields recover, helping the country to boost shipments while the global harvest contracts, according to the nation’s agricultural commodities forecaster.
Output in the fifth-biggest exporter may total 24.4 million metric tons in 2015-2016 from 23.6 million tons a year earlier, the Australian Bureau of Agricultural & Resource Economics & Sciences said in a report, giving the first estimate for the crop to be planted from next month. Exports may rise to 17.95 million tons in the year starting 1 July from 16.9 million tons, the bureau said. Global output will drop 1.8 per cent, it said.
Wheat lost 15 per cent this year, extending a back-to-back annual slump, as global supplies expanded. Record global grain output will boost inventories at the end of 2014-2015 to the highest in about 30 years, the International Grains Council estimated. While the ample stockpiles will cap rallies in coming months, possible challenges to new-crop supply may support prices through the fourth quarter, Rabobank International said.
“Seasonal conditions will be the most crucial factor,” Jammie Penm, chief commodity analyst at Abares, said in a phone interview. “If soil moisture is sufficient, then farmers can plant what they plan and to-schedule. Even if soil moisture is unfavourable farmers can still plant, and hope for in-crop rain.”
Australian farmers may plant 13.89 million hectares, up 0.6 per cent from a year earlier, the Canberra-based bureau estimated. Output will also be boosted on expectations that yields in eastern Australia will rebound from below-average last year it said.
Global output may fall to 707 million tons in 2015-2016 from 720 million tons a year earlier as a drop in yields offsets a rise in area, according to Abares.
Bloomberg News, edited by ESM
