SINGAPORE/SYDNEY: Australia is poised for a second consecutive bumper wheat harvest as farmers plant grain in near-perfect growing conditions, easing some of the global supply concerns, which lifted world prices to multi-year highs last month.
Widespread rains in key growing states ahead of planting in April and May boosted the soil moisture needed for seeds to thrive, although it is still months until the most critical crop developmental period later this year.
"We have to see how the winter weather goes," said Phin Ziebell, agribusiness economist at National Australia Bank in Melbourne. "As of now, we are looking at above-average crop."
Looking ahead, Australia's east coast and south coast are on course for favourable crop weather, according to forecasts from the country's weather bureau.
There is an 80% chance of a more-than-average rainfall in New South Wales and South Australia over the next three months, Australia's Bureau of Meteorology said last week.
Australia's largest wheat-producing state - Western Australia - is expected to record average rainfall.
The outlook will boost already strong conditions on both coasts, analysts said.
"Soil moisture in New South Wales is above average, and in some parts it's at the highest point in 10 years," Cheryl Kalisch Gordon, grains analyst at Rabobank, said.
"In Western Australia, Cyclone Seroja left a trail of destruction when it struck the northern wheat belt, damaging major farming infrastructure. A consolation was that farmers received 50 mm of rain, which kickstarted the season."
A bumper Australian wheat harvest is likely to ease supply concerns among key importers in Asia and the Middle East.
Benchmark Chicago Board of Trade wheat futures in April rallied to their highest since 2013, and are up around 30% from a year ago.
"The current moisture levels and the outlook for the coming 2021/22 Australian grain winter crop are looking good in most areas so far and may well continue to improve," Ole Houe, a director at brokerage IKON Commodities in Sydney, said.
"Next year's wheat crop, which is in the final stages of planting, has been increased by almost 1 million tonnes to 29.5 million tonnes, which is well above average, but still below last season's stunning crop of 34.8 million tonnes."
Australia will update its official estimate next month. The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) in March pegged 2021/22 wheat production at 25 million tonnes.