North braces for ongoing tight grain supplies

New crop stockfeed wheat prices jumped $20 to $390 last week on a mix of northern crop concerns and strength in wheat values in WA. East Coast ASW new crop wheat futures ended the week $4 higher at $340.

United States wheat futures surged 6pc higher last week as excessive weather threatened Midwest corn plantings, dragging wheat higher in its wake. Early wheat harvest is under way in the US hard red winter wheat areas where yields are coming in better than expected.

In its first detailed production forecasts for the 2019 season, Australia's government crop forecaster ABARES predicted the national winter crop would climb to 36.4 million tonnes. The report said that east coast wheat and barley output would double to 12mt from last year's drought ravaged crop of only 6mt.

Above average May rainfall for much of SA, Victorian and southern NSW has provided a good start for farmers in south eastern Australia, but the outlook for northern farmers remains patchier, ABARES said.

Below average autumn rainfall and dry soils in northern NSW and parts of Queensland is expected to limit grain winter grain production in these areas, making for another year of tight grain supplies.

ABARES said Queensland wheat production was forecast to rise to 690,000 tonnes from last year's 460,000t after increased plantings and improved yields.

The report also flagged the variable crop outlook in Queensland's cropping regions. Wheat's yields are expected to be higher than last year because of favourable crop conditions in central Queensland, whereas winter crops in southern Queensland continue to struggle with the dry weather.

Queensland barley production is set to fall by 10pc from last year to around 85,000t due to the dry weather in southern Queensland, ABARES said.

Chickpea plantings fell by around 10pc to 180,000 hectares in response to the weaker import demand from India, the report showed. Chickpeas production is forecast to rise by 4pc around 200,000 because of higher yields. Almost all chickpeas are expected to be grown in the central Queensland where prospects are reasonable, ABARES said.