Australian wheat production to rebound

Government commodity forecaster ABARES is projecting that Australian wheat production will increase by 40 per cent in 2020/21 to 21.3 million tonnes after recent rain across eastern Australia. ABARES expects national wheat plantings to climb by 20pc to 12 million hectares up from 10.1 million last year.

Wheat planting is expected to kick off in coming weeks in some areas of the northern cropping zones and will continue into the winter in the south. It's early days to accurately forecast national grain productions, but some are already saying that plantings may be larger than what ABARES has flagged.

Sharply reduced sheep and cattle numbers after years of drought in Queensland and much of NSW is expected to see farmers ramp up grain plantings as they chase cash flow. Widespread soaking rain across Queensland and NSW has bolstered the chances of a significantly larger winter crop planting.

A major rainfall event dumped more rain across NSW cropping areas last week. Much of northern, central and southern NSW received a general 30mm to 70mm of rain in the past week which has farmers readying to plant oats, barley, canola and early wheat.

ABARES said the recent rains would not be as beneficial to beef production, forecasting an almost 14pc decline as farmers continue to rebuild herds after the drought left them unable to feed or water livestock.

Domestic grain markets remain soft as the rain continues to ease buyer concerns about tight supplies ahead of the 2020 winter crop harvest, still some 10 months away. Feed barley prices were unchanged last week at $360 delivered into the Darling Downs compared to $380 in early February. New crop sorghum prices are also drifting lower.

Australia exported around 1.3mt of wheat in January, up from 919,000 tonnes in December. It was the largest monthly wheat exports in 18 months. WA accounted for close to 1.1mt of the January exports.

Traders are saying the combination of the small 2019 wheat harvest and robust export demand will leave limited carry over supplies before the 2020 harvest.

January barley exports were larger than expected at 430,000 tonnes, the largest export month since March 2019. China accounted for 234,000 of the January barley exports with a further 117,000t going to Thailand.