Australia is on track to reap a near-record wheat crop in 2011/12 thanks to benign weather in the country's top grain exporting state of Western Australia, analysts and traders said on Monday. The world's fourth largest shipper of the grain could export as much as a record 21 million tonnes in the marketing year to September 2012, said Andrew Woodhouse, an advisor at commodities trading firm Advance Trading Australasia.
"Exports could easily be in the 20 to 21 million tonnes range," said Woodhouse, who estimated 2010/11 exports at around 18 million tonnes. The previous record was in 1996/97 when 19.2 million tonnes of the grain were sold overseas.
Analysts estimated around 9 million tonnes of old crop wheat remained unsold at the end of the 2010/11 marketing year, adding to the export task at a time when global supplies are abundant. Australia's 2011/12 harvest has just began but is picking up speed just as the northern hemisphere wheat harvest draws to an end. The front month Chicago Board of Trade wheat futures contract has fallen from a 2011 peak of $8.93-1/4 per bushel in February to $6.45-1/4 on Monday.
US farmers are withholding stock from the market, hanging out for higher prices, while Australian farmers have refrained from forward selling the new harvest with the same hope. The US Department of Agriculture (USDA) on October 12 projected a 5.4 million tonnes rise in global wheat supplies for 2012/12 from a year earlier. The USDA said larger stocks in 2011/12, following big harvests in major grain exporting countries such as Australia and Canada, coupled with higher old-crop stocks, would be behind the rise in global stocks to a 10-year high.
In September, Australia's government chief commodities forecaster estimated the country's exports for 2011/12 could hit 20.4 million tonnes. It put the harvest now getting underway at 26.2 million tonnes, just short of the record 26.3 million tonnes reaped in 2010/11. Other estimates are more cautious. Advance Trading's Woodhouse said his firm estimated the current crop at 24.39 million tonnes, of which around 9 million tonnes would be reaped in Western Australia, double last year's drought-plagued western harvest. In 2003/04, Western Australia reaped a record 11 million tonnes crop.
Advance Trading has raised its estimate from 23.7 million tonnes last month following recent rains across the country that boosted crop prospects. Australian Crop Forecasters (ACF) has a similar number. "We're looking about a 24 million tonnes harvest which may be on the low side," said Gavin Warburton, an analyst at ACF (ACF). He said there remained the possibility of the harvest being hampered by wet weather in eastern Australia as was the case last year when nearly half the crop was downgraded to general purpose or feed wheat quality as rain soaked fields.
ACF's Warburton said Western Australia, which exports almost all of its grain, would be the stand-out performer this year. It also expects a near-record crop of around 9 million tonnes. "Overall quality across the country should also be better - it is likely to be a more normal year with 75 percent to 85 percent being of milling wheat quality although higher protein wheat will still be tight," said Warburton.
Harvesting has already begun in the north-eastern state of Queensland, which is expected to yield a 1.5 million tonnes crop, in line with an average year. Warburton said some crops had struggled due to water-logged fields at the beginning of the year, leading to lower protein levels. The state typically produces a large portion of 13-percent plus protein wheat which globally is in short supply.