ABARES cuts wheat and sorghum crop forecasts

ABARES cuts wheat and sorghum crop forecasts

Agribusiness
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Sorghum production is forecast to decline by 74pc to 260,000t,

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Australian wheat production in 2019 was the smallest since 2008, as drought slashed yields across most states.

Government commodity forecaster ABARES said the 2019 wheat production was 15.2 million tonnes, down from the 15.85mt they predicted in December and behind last year's crop of 17.3mt.

Lower than expected yields in SA, WA and NSW prompted the latest round of production cuts. ABARES left its wheat production forecast for Queensland unchanged at 460,000 tonnes.

Private forecasters believe ABARES may be overstating the national wheat crop, based on the disappointing grain deliveries into the state bulk handling systems.

Table 1: Queensland grain prices. Source: Lloyd George.

Table 1: Queensland grain prices. Source: Lloyd George.

Summer crop production estimates were also lowered after well below average rainfall across most cropping areas in Queensland and northern NSW. ABARES said the area planted to sorghum in Queensland in the 2019/20 season tumbled by 61 per cent to around 239,000 hectares. Sorghum production is forecast to decline by 74pc to 260,000t, driven by the smaller plantings and lower yields.

NSW sorghum out is also set to tumble, ABARES projected. The area planted to sorghum in NSW is estimated to be a record low 12,000ha with production projected at just 30,000t.

Limited volumes of sorghum are keeping prices supported. Sorghum values are holding at around $415 delivered into the Darling Downs and around $400 a tonne on farm.

Stockfeed wheat prices continued to drift lower last week with the rain and the downturn in demand. Traders are reporting weakening demand from the smaller feedlots and backgrounders.

Stockfeed wheat slipped $10 to $440 delivered into the Downs destinations while barley was unchanged at $385/t.

Southern wheat and barley markets continued to drift lower last week.

Attention is turning to the new crop planting decisions with autumn just around the corner. Soaking rains across the Central Highlands and Darling Downs has set the platform for a large winter wheat and barley planting. Chickpea plantings are expected to remain low amid the absence of demand from India.

India's agriculture ministry is forecasting total pulse production for 2020 at 23.02mt, or 2.76mt above the five-year average production of 20.26mt. Indian's 2020 wheat crop is forecast at a record large 106.2mt, the ministry said.

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