SYDNEY (Reuters) — Heavy rains across Western Australia have provided near ideal wheat growing conditions, boosting the outlook for the world’s third-largest exporter after plantings on the east coast were helped by rains last month.
Much of Western Australia, the country’s largest wheat producing state, will receive up to 50 mm of rain on Thursday, the Australian Bureau of Meteorology said, coming after pockets of the western wheatbelt received record April rains.
The rains may see Western Australian farmers advance wheat sowing, analysts said, while the crop already in the ground will be boosted.
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“It is a fantastic start to the season in Western Australia,” said Luke Mathews, commodities strategist, Commonwealth Bank of Australia. “Moisture is the single biggest limiting factor for Australian agriculture and additional rain at this time of the year, even if it does hold up planting momentarily, the rain will be welcomed by producers.”
However, despite the favourable growing weather, Australia’s production remains at risk from a return of an El Nino.
The weather bureau on Tuesday pegged the chance of an El Nino at 70 percent and said it could arrive as early as July. The weather event can bring warmer, drier weather to Australia’s east coast.
Chicago Board of Trade wheat futures have eased in recent days, though prices remain near a 13-month high as soaring temperatures across U.S. southern Plains raise fears of potential curbs to production in the world’s largest exporter.
Australia’s 2014-15 wheat season has got off to a strong start after timely rains across the country’s east coast eased fears that recent drought conditions would derail production.
Australian wheat production was pegged by the government commodities forecaster in March at 24.795 million tonnes, down on the 27.795 million tonnes produced in the previous year.
Buoyed by recent bumper production years, Australian farmers are set to devote a three-year high of 3.3 million acres of land to growing wheat, the Australian Bureau of Agriculture and Resource Economics and Sciences estimated in March.
Exports are seen at 19.1 million tonnes, which would rank Australia as the third-largest exporter, according to the U.S. Department of Agriculture.
