Australia wheat output seen beating government forecast
Australia is this year set to produce its fourth largest wheat crop, a Reuters poll showed, beating government predictions even as dry weather threatens yields in some growing areas.
Higher wheat output in the world's second largest exporter of the grain could ease concerns over global supplies and cap a rally in U.S. futures, which climbed to their highest in more than four months this week.
Australian wheat production will rise 14 percent to 25.3 million tonnes in 2013/14 from 22.1 million tonnes last year, according to the survey of 11 analysts and traders.
That compares with a forecast of 24.5 million tonnes by the Australian Bureau of Agriculture, Resource Economics and Sciences in September.
Australian wheat output has only surpassed 25 million tonnes four times previously, with record production of 29.5 million tonnes hit in the 2011/12 season.
"Parts of Western Australia and the central wheat belt got some very timely rains in September," said Garry Booth, manager for commodities at ICAP Agriculture Australia.
But despite the increase in production, it is unlikely that Australian wheat will displace significant volumes of shipments from No.1 exporter the United States or other origins.
Australia's new-crop wheat has been in strong demand this year thanks to additional purchases by China after about 20 million tonnes, or around 16 percent, of its crop was damaged by adverse weather.
"If China is going to buy 3 or 4 million tonnes of Australian wheat then there is not much scope for Australia to offer an alternative to U.S. supplies," said Paul Deane, senior agricultural economist at ANZ Bank.
Australian port access for wheat is almost fully booked right from December, when the new-crop hits the market, to June.
Analysts predicted a return to decent output in the country's largest wheat-producing state of Western Australia due to timely rains. They said it would rise from 6.9 million tonnes last year, which was well below the five-year average of 7.9 million tonnes.
CBH Group, Australia's largest grains handler, forecasts production in Western Australia at 8.5 million tonnes, compared with the 7.33 million tonnes estimated by ABARES in September.
And the Australian Crop Forecasters tipped South Australia's crop to exceed 5 million tonnes, just shy of its largest-ever harvest.
Hot and Cold
While farmers in Queensland and northern New South Wales are making rapid progress in harvesting their wheat crops, analysts said early results show lower yields there due to unfavorable weather in the last few months.