MOST Australian cropping regions have had a good autumn break and seeded full program but a forecast drier winter and spring is weighing on sentiment.
Australian winter crop production is forecast to fall 34 per cent from last season’s record.
Decreased production in key exporting nations along with continued strong global demand will see export opportunities remain positive for Australian wheat.
Winter cereal production in Australia is projected to fall from record highs under expectations of below average rainfall for winter and spring.
At present, wheat production is forecast to fall by 34 per cent to 26.2 million tonnes, slightly below the 10-year average.
Australian barley production is forecast to fall by 30 per cent to 9.9 million tonnes, around 11 per cent below the 10-year average.
The planting program has progressed well in most states after growers opted to utilise soil moisture from good rainfall received in March and April and sow the crop early.
Overall germination and crop establishment has been good, although dry conditions in parts of northern New South Wales has negatively impacted crops in the region.
After getting off to a good start, the downside risk to this season’s crop is the potential for an El Niño and positive Indian Ocean Dipole event to form later this year.
Wheat exports have been at record pace during 2023 aided by Asian buyers substituting corn with Australian feed wheat.
Demand is expected to remain strong for the remainder of the 2022/23 marketing year.
Decreased production in key exporting nations along with continued strong global demand will see export opportunities remain positive for Australian wheat.
Global wheat prices have fallen 17 per cent for the year to date and 46 per cent since hitting an all-time high in March last year.
Australian wheat prices have held up comparatively well, dropping around 13 per cent since the beginning of the year.
Global prices are expected to fall further in 2023/24 because of expected rising global grain production.
Whether local wheat prices follow will depend on the outcome of local production, though generally Australian wheat prices are expected to stay elevated and trade at historically high values over the coming six months.
Australian Premium White (APW) grade wheat is forecast to trade between $350 to $400 per tonne over this period.
Ongoing strong demand from Asia and in particular China, will continue to support prices.
To find out more about Rural Bank, visit www.ruralbank.com.au or call 1300 660 115 to find your local Agribusiness Relationship Manager.
They will be at site #53 at the Mallee Machinery Field Days.
