Canadian exporters could face stiff competition from Australia in 2013-14.
“We’re still a ways away from a big and assured harvest in Australia but for the most part things are looking reasonably good,” said Peter Wilson, director of northern states for Alliance Grain Traders in Australia.
Conditions are particularly good in the Mediterranean cropping zone, which includes Western Australia, South Australia, Victoria and southern New South Wales.
“If we get a mild and wet spring we could really punch yields up quite high,” said Wilson.
Western Australia had ideal planting conditions from mid-April to late May but then it turned dry, causing some forecasters to significantly reduce their wheat production estimate for the biggest wheat producing state.
Rabobank is forecasting 22.9 million tonnes of wheat production, which is well below the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) June estimate of 25.4 million tonnes.
Wheat prices have been rising in response to dry conditions in Western Australia and New South Wales.
Wilson doesn’t see cause for alarm in Western Australia, which has received plenty of rain in key wheat growing areas in recent weeks.
“The rainfall in the central and southern wheat belt will certainly make up for any of the shortfalls in the north,” he said.
Western Australia is also the top canola producer. Most of that crop is grown in the southern portion of the state where the weather has been favourable.
Conditions have been superb in the remainder of the Mediterranean cropping region.
“We’re probably well and truly on track to achieve some pretty good outcomes in southern and western Australia,” said Wilson.
“Come harvest time, farmers will definitely be wanting to move a lot of grain because they’re going to have a lot of barley, wheat and canola to start pushing into international markets.”
The other main growing region comprises northern New South Wales and Queensland on the eastern side of the country.
It is more temperate than the Mediterranean zone, with usually consistent year-round rains.
That region had good moisture until August when the tap turned off.
“Now it’s really starting to dry up and we’re starting to warm up a little bit, so we need some rain here in the next 10 days to two weeks,” said Wilson.
Drew Lerner, president of World Weather Inc., confirmed that conditions have deteriorated in Queensland and northern New South Wales where wheat is approaching the reproductive stage.
“It has not rained there in quite a few weeks. Unirrigated crops are stressed,” he said. “There will be lower yields there.”
The forecast as of Aug. 29 called for more dry weather for that region over the next two weeks.
There was also a recent frost in the area but he doesn’t expect widespread damage.
Nearly 90 percent of Australia’s desi chickpea crop is grown in Queensland and New South Wales. That crop is in jeopardy due to the lack of moisture.
“If we don’t get some rain, we’ll obviously have some below-average outcome in terms of (chickpea) yield but we won’t have any disease problems. The quality will be quite okay,” said Wilson.
Peas and lentils are primarily grown in South Australia where conditions have been exceptional.
“Providing we get a half reasonable spring, the peas will yield very nicely and I’d say lentils are on track for a pretty good outcome as well,” said Wilson.
His biggest concern is the mounting currency volatility in key markets like India, where the rupee has been plummeting in relation to the U.S. dollar.
“It’s really eroding the confidence of the importers,” said Wilson.
Grain companies will be wary of that market risk and won’t likely build huge inventories of pulses or other crops.
ABARES is set to release the next official government production estimate for Australia’s crop on Sept. 10.