Australia might have been booted from soccer’s World Cup, but its wheat crop has another couple of rounds left before anyone should consider it defeated, says the Canadian Wheat Board.
There’s lots of time to stage a stunning recovery.
“It is too early,” said CWB market analyst Rick Steinke.
“They have a huge planting window. Unlike us, they don’t have any crop insurance. At some point … they have a big incentive to try to seed the land.”
Many portions of Australia’s wheat growing regions are suffering from a lack of rain. Millions of acres are too dry for the crop to germinate, so many farmers have held back from seeding.
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But most areas have good soil moisture reserves from autumn rains. (Australia’s fall occurs at the same time as the Canadian spring, and the country has just moved into winter.)
“If they can get germinating rains, it’ll punch its way down to the moisture below,” said Steinke.
Increasingly dire weather reports have come from Australia in recent weeks, and parts of its wheat production acreage are getting near drop-dead dates, when it will be too late to plant winter wheat for this growing season.
On June 20, the Australian Bureau of Agricultural and Resource Economics released an extensive report on crop conditions forecasting a likely acreage decline of six percent for overall winter crops and a five percent drop in wheat acreage.
If that wheat crop gets average yields on the reduced acreage, it will produce a crop of 22.8 million tonnes, or a drop of nine percent from last year’s big crop.
Steinke said no one should get too excited by this projection, because the same sort of problem existed last year at this time and then disappeared after rain rematerialized, allowing the Australian crop to hit record levels.
“The trend is to have a decline in acres, but it’s much, much too early to get really excited about it in terms of its potential for us,” said Steinke.
“Last year everyone was excited about it … and the rains came and they produced a whopper. We’ve seen that before.”
Last year the saving rain occurred in the week of June 15, so this year’s dryness is a greater concern than last year’s, but most areas still have a few weeks before the seeding window is closed.
Australia does not compete directly with Canada’s quality red wheat, but is a competitor in lower grades. If the Australian crop falls short this year, it could help lift prices at the low end of the market, Steinke said.
“It would bring up the bottom of the market,” he said.
Better news could come for malting barley. Australia is a head-to-head rival with Canada in this crop.
