Australia's Graincorp optimistic on 2011-12 wheat harvest

Australia's largest eastern state grain handler, Graincorp Ltd , on Thursday forecast favourable conditions for country's eastern 2011/12 wheat harvest but cautioned it was too early to predict the final outcome.
"While crop conditions are looking promising in most regions, favourable planting and growing conditions are needed to ensure good germination and a strong harvest outlook," said the company's chief executive Alison Watkins.
Australia is one of the world's top wheat exporters. Graincorp controls the majority of grain exports from eastern state ports with its income largely dependent on the volume of shipments the firm handles.
Watkins was speaking after Graincorp announced a 68 percent rise in first-half net profit to A$87.7 million to March 31 as revenue was boosted by a bumper eastern coast harvest in Australia. She said fundamentals remained supportive for grain prices over the long-term due to rising demand but the short-term outlook was difficult to predict because of supply uncertainty in the northern hemisphere.
US wheat futures rose 0.7 percent on Thursday, rising for a second straight session as harsh weather continued to threaten crop yields in the United States and Europe. Crops in the northern hemisphere are approaching harvest time, but less than ideal growing conditions have left the market focused on the northern wheat outlook.
In the United States, the world's largest wheat exporter, the winter wheat crop in the southern plains, has suffered from drought conditions while the northern grain regions have suffered planting delays due to wet weather. Crops in France and Germany have also suffered setbacks due to dry weather.
In Australia, good subsoil moisture in the east and attractive prices mean farmers are confident of another big crop. "Our focus is making sure we're absolutely certain that we're ready for another big crop," said Watkins.
"As for the quality it is too early to say," she said. Crop forecasting firm Australian Crop Forecasters is (ACF) predicting an eastern Australian wheat, barley and canola crop of 19 million tonnes.
ACF estimates about 13.8 million tonnes of wheat will produced in the eastern Australia while 24.9 million tonnes overall, provided follow-up rain is received in Western Australia, typically the country's top exporting state.
"There has been some reasonably favourable planting weather in the West but the outcome there depends on more follow-up rain," said Gavin Warburton, a crop analyst at ACF. The outlook is for an above average harvest in the eastern states, according to Warburton.
"The price outlook remains reasonably favourable so there is plenty of encouragement to plant wheat," said Warburton. Australia's grain growers are busy planting wheat and other winter crops that will be harvested in October through to the year-end.