Australian wheat output to jump 11.8 percent as La Nina provides much needed rains

SYDNEY (Reuters) – Australia’s 2018/19 wheat crop is expected to rise
11.8 percent from the previous season, the country’s chief commodity
forecaster said on Tuesday, as La Nina weather conditions boost yields
across the world’s fourth-largest exporter.

And, Australian canola production during the 2018/19 season will total 4
million tonnes, up from 3.7 million tonnes produced last year.

Australia will begin sowing wheat crops late next month and despite a
small decline in plantings, farmers will harvest 23.7 million tonnes,
the Australian Bureau of Agriculture, Resource Economics and Rural

Sciences (ABARES) forecast, up from 21.2 million tonnes produced last

ABARES said the rise in production follows the La Nina weather
phenomenon will increase the rainfall for Australia’s east coast. That
will provide much needed water for a region that last season received
only half the amount it would normally, data from Australia’s Bureau of
Meteorology showed.

Rising Australian wheat production could temper the recent gains in
benchmark prices. Wheat futures in Chicago have rebounded from one-year
lows reached in December on concerns weather could impact supply but the
higher output could renew the market’s focus on bumper global

Despite possibly pressuring prices, the increased Australian output will
aid the country’s largest bulk grain handler GrainCorp, which last month
said it expects underlying profit to halve this financial year after
poor production across the country’s east coast, where the company
dominates trading.

The La Nina weather event will also aid Australia’s cattle industry,
which has been struggling to rebuild after drought conditions in 2015

and 2016 as a result of an El Nino weather pattern left farmers unable
to feed and water their livestock.

ABARES said Australian beef production will rise to 2.23 million tonnes,
from 2.2 million tonnes produced last year.

Higher production will allow local farmers to tap the lucrative export
markets of China and Japan, ABARES said, as exports grow 2 percent next

Australia’s sugar industry, which is also concentrated on the country’s
east coast, will also benefit from the La Nina-associated rains.

Sugar production will increase to 4.8 million tonnes next season, from
4.7 million tonnes produced last year, a crop that was also damaged by a
powerful cyclone in March 2017.

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