Heavy rains expected to drive Australian wheat production above estimates

SYDNEY, June 3 (Reuters) – Forecast heavy rains over Australia’s east coast next week are expected to boost wheat production above official estimates in the world’s fourth largest exporter, analysts said on Friday.

As much as 100 millimetres is forecast to soak most of Queensland, New South and Victoria states over the next eight days, the Australian Bureau of Meteorology said on Friday.

This would be about half the average rainfall in June, with some areas receiving as much 300 millimetres.

The rains will provide much needed moisture to recently planted wheat crops in the region, boosting production prospects for the grain that had suffered from dry weather earlier in the season.

“Weather forecasters expect rain to continue in northern (New South Wales) and Queensland through the weekend. The region had been running behind for winter crops but this system will be the required kick-start for the season,” said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia.

Brighter crop forecasts in the region will likely mean national production exceeds official estimates, analysts said, but higher production would add pressure to global prices, which hit a near one-month high on Thursday.

“If this weather holds and we get a decent winter in terms of rains, I think we are looking at a very good national wheat crop,” said Phin Ziebell, agribusiness economist, National Australia Bank.

Ziebell estimates Australian production at 26.1 million tonnes, which if realised would be the highest since 2012.

Australia’s chief commodity forecaster in March pegged national wheat production at 24.5 million tonnes.

Production may also be aided if a La Nina weather event materialises. The weather event, typically brings wetter than average conditions across the Australian east coast, and Ziebell said it could drive production to nearly 27 million tonnes.

Australia’s Bureau of Meteorology last week pegged the chance of a La Nina at 50 percent.

About the author

Markets at a glance

explore

Stories from our other publications