Australia set for record 42 mln T wheat crop as harvest wraps up

Australia wheat production is expected to rise to a record 42 million tonnes as results from the final phase of harvest show higher yields in the world’s second-largest exporter of the grain, traders and an analyst said.

Higher Australian wheat output comes at a time of stiff competition from the Black Sea region, where all-time high output in Russia is keeping theglobal marketwell supplied. The benchmark Chicago wheat futures Wv1 are on track for a weekly decline of more than 5%, the biggest in six months.

“We are getting monster yields,” said Phin Ziebell, agribusiness economist at National Australia Bank. “Western Australia has performed very well.”

Western Australia, the country’s biggest wheat exporting state, is estimated to produce 16 million tonnes of wheat as compared with earlier expectations of 13 million tonnes, said one Sydney-based trader.

The country is poised to ship record volumes in the months ahead. “Ports are almost fully booked for wheat shipments for March and April. Buyers are now looking at May shipments,” the trader said.

In December, the Australian Bureau of Agricultural and Resource Economics (ABARES) estimated wheat production, the country’s major grain crop, at 36.6 million tonnes in the 12 months to June 30, 2023.

However, the higher rainfall that drove the stronger yields has likely resulting in a large portion of the Australian crop developing into average or below-average milling wheat instead of higher protein grades for human consumption.

“Some of the lower grade milling wheat might substitute feed wheat in animal rations,” a second trader said in Sydney.

Australia’s wheat crop was hit by excessive rains and flooding at the end of 2022 on the east coast, impacting the quality.

Australian feed quality wheat is being quoted around $290 a tonne on a free-on-board basis, Australian Standard Wheat is being offered at $300 a tonne and Australian Premium White wheat is around $320-$325 a tonne, traders said.

Tags: Australia, wheat, crop forecast