The Agricultural and Horticultural and Development Board (AHDB) has confirmed the potential for the upcoming grain harvest in Australia to be one of the largest on record.
This projection is based on the figures released last week by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).
Australian Wheat production has risen 9% from June’s estimate to 31.8Mt and is now 23% up on the year – 7% above the five-year average.
Barley production has increased by 6% from June’s estimate to 12.2Mt, which is 13% up on the year but 5% less than the five-year average.
Exports have also been forecasted upwards from June’s initial estimates to 7.3Mt, but remain lower than last year by 4%.
Meanwhile, Australian rapeseed production has risen 2% from June’s estimate to 5.5Mt. The smaller rapeseed area (3.2Mha) due to greater cereals planting has contributed to the 8% fall in production on the year and is 3% less than the five-year average.
Lower production on the year has partly led the 24% year-on-year decline in exports to 4.1Mt.
Upcoming grain harvest
According to the AHDB, the continued favourable outlook for Australian wheat production could offer some relief to the tightness in wheat stocks of major international exporters at the present time.
Currently, the United States Department of Agriculture (USDA) is forecasting this figure to be down 8% from last year and 12% below the five-year average.
Where barley is concerned, China is a key foreign market destination for Australia, accounting for approximately 80% of exports.
However, there have been reports suggesting that Chinese purchasing of imported feed grains may fall due to present ample supply and lower-than-expected demand.
This could spill pressure over to global barley markets should Chinese demand fall short of usual purchasing, as Australia looks for alternative destinations.
Meanwhile, lower year-on-year rapeseed exports from Australia had been forecast back in June’s ABARES report attributed to the challenging start to the year for rapeseed.
Following news that China has launched an anti-dumping investigation into Canadian rapeseed imports, some market participants have suggested that there could be increased Australian rapeseed exports to China in place of Canada.
However, as Canada and Australia share some similar export destinations, it could be that global rapeseed trade flows adjust with minimal impact on global rapeseed prices.
