Expectations for the Australian wheat harvest have again been lowered. As a result, the lowest yield in 12 years is now expected. The cause is the severe drought. The harvest is lower than expected, especially on the east coast of the country.
This is evident from new forecasts from Abares, an analyst firm and part of the Australian Ministry of Agriculture. Abares was expecting in December already a considerably lower wheat harvest. Then the harvest was estimated at 15,85 million tons. Now that the harvest is in, Abares has estimated wheat production even lower at 15,17 million tons of wheat.
According to some analysts, the wheat harvest could be even lower than the research firm's estimates. According to IKON Commodity's, the government's forecast is still too high. IKON Commodity's expects a yield of about 14,5 million tons, Reuters writes. This would bring exports to approximately 7 to 7,5 million tons of wheat. According to the USDA (United States Department of Agriculture), this was 9 million tons last year.
Rising futures
Concerns are emerging about world supplies after Australia announced production is at a 12-year low. This sent wheat futures in Chicago up more than 1% on Tuesday. These are now at their highest point in a week.