Australia is not the biggest wheat producer in the world.
But it does rank among the major exporters, accounting for 15 to 18 percent of the 100 million tonnes of wheat traded globally each year.
That’s why a drought in some wheat-growing regions down under is improving world wheat prices.
Canadian Wheat Board analyst Don Bonner said crop production estimates for Australia have dropped by more than 10 percent over the past month.
“A 10 percent reduction is fairly significant for them,” he said. “Hopefully, they’ll be less aggressive in the marketplace because of it.”
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Earlier in the Australian growing season, drought hurt yields of high quality, high protein wheat in southern Queensland, and durum yields in northern New South Wales.
More recently, farmers in Western Australia, which accounts for one-third of the country’s wheat crop, have lost yields to drought.
As harvest begins in the country, crops are getting plenty of rain. It’s too late to help yields, but may hurt the quality of the harvested grain.
The International Grains Council dropped its estimates of Aussie wheat and durum production to 21 million tonnes, down from 23 million. That is a significant drop from last year’s crop, which approached the 24 million tonne mark.
Recent rains have made ideal conditions for locusts in the country.
The Australian Plague Locust Commission is warning farmers they may face the largest plague on record.
But for this year’s wheat crop, locusts have caused only isolated damage, said wheat board weather analyst Bruce Burnett.
“Really, in terms of total impact, it hasn’t been that great this year,” he said.
“The drought has caused much more problems.”
