In Australia, arable farmers are well on track to achieve the largest harvest of winter cereals since 2016. A nice plus is expected, especially in the eastern states. In the west of the country, the situation is somewhat milder. Rain has thrown a spanner in the works there. Now that La Niña has been declared, it is exciting what the odds will do.
Australian winter wheat production is estimated at 27,6 million tonnes, the largest harvest since 2016. It is 1 million tonnes less than early September was forecast, mainly due to heavy rain in western Australia. Rainfall over the past 2 weeks has dampened harvests for that area, raising concerns about wheat quality. The harvest forecast for western Australia has fallen from 8,9 million tonnes in September to 7,9 million tonnes.
La Niña leads to uncertainty
Growers in Western Australia are anticipating the coming weeks, with the Bureau of Meteorology recently declaring a La Niña. This natural phenomenon is generally associated with above-average precipitation in eastern and northern Australia and with drought in western America. This could mean an increase in grain prices. Global prices have already risen sharply in recent months due to increasing supply concerns in some growing regions. The CBoT quotation for wheat is now $5,93 per bushel.
The price increase was well timed for Australian growers and traders, because the country will bring large volumes to the market in the next 3 months. Recent domestic wheat prices have been between $200 and $300 per tonne at major Australian ports. Although there is skepticism about whether prices will remain so high, the news about Australian wheat prices is generally positive. On the Matif, wheat is now trading at €210 per tonne, a sharp increase compared to the average of €175.
High yield of barley
Australian barley prices remain low, reflecting trade restrictions in China and high dependence on that market. This situation is exacerbated by the decent harvest, much of which is expected to remain in storage. Barley production in Australia is expected to be 23% higher than the 10-year average at 11,2 million tonnes.