SYDNEY (Reuters) — Heavy rain across Australia’s east and west coasts has buoyed prospects for the 2015-16 wheat crop, analysts said on Thursday, but the threat of an El Nino looms large.
Farmers are busy sowing a crop that is expected to be nearly 25 million tonnes, analysts said, and the heavy rain will boost prospects after dry weather in recent months reduced soil moisture. Output in the season that ends in June 2015 was 23.61 million tonnes.
“There have been some good rains in parts. Some have done better than others, but it’s very welcome news for farmers,” said Tobin Gorey, director for agricultural research at Commonwealth Bank of Australia.
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Regions of Australia’s east coast, which recorded levels of rain close to record lows in recent months, may receive more than 150 millimetres of rain over the next few days, the Bureau of Meteorology (BOM) said. The states of New South Wales and Queensland also saw heavy rain last week.
In Western Australia, the country’s largest wheat-producing state, the crop will probably have been helped by showers last weekend, a further help for soil that saw some of the highest levels of March rain on record, data from the BOM shows.
A good start to Australia’s wheat season will add further pressure to global prices, which fell to a six-month low earlier this week.
Favourable conditions are expected over the next two months.
“For May, large parts of the mainland are likely to be wetter than normal,” the BOM said last week.
However, agronomists and analysts warned an El Nino may limit progress later.
Climate indicators are nearing levels associated with an El Nino weather event, the BOM said on April 28.
Should an El Nino emerge, the system would probably bring below-average late winter and spring rainfall over eastern Australia and above-average daytime temperatures over the southern half of Australia.
Rain is a critical determinant of the success of east coast wheat production, where Australia’s high-protein supplies are grown.
“An El Nino would limit higher-protein wheat production and I think you would see mid-protein wheat prices rally quite strongly,” said Paul Deane, senior agricultural economist at ANZ Bank.
