Commodities Buzz: USDA Expects 12.50 percent Decline In Australia's Wheat Production For MY 2018/19
11-Jul-18   09:10 Hrs IST

As per the latest update from United States Department of Agriculture (USDA), Australian wheat production is forecast at 21 MMT for 2018/19, 12.5 percent below the official forecast, due to very dry and hot conditions across major wheat growing areas. The harvested area is expected to fall slightly to 12 million hectares. Moderate rainfall from May 2018 has improved soil moisture for the winter wheat crop, but continued rainfall is essential during the planting window across many regions, especially in eastern Australia. Wheat is the major winter crop in Australia, with sowing starting between April and July. The main producing states are Western Australia, NSW, South Australia, Victoria, and Queensland. Central Queensland's harvest starts in August and progresses down the east coast to Victoria, and ends in January. On the west coast, the wheat harvest starts in October and is completed during January.Wheat domestic consumption is estimated at 8.5 MMT for 2018/19, due to a significant shortage of grains for livestock production caused by poor pasture and dry conditions across eastern Australia. This situation has led to a sharp rise in domestic feed grain and hay prices in eastern Australia (see Table 1 and Chart 3). Higher domestic consumption is expected to come primarily from increasing feed grain demand, which is expected to rise to 5 MMT while human wheat consumption is expected to remain stable at 3.5 MMT.

Australian wheat exports are forecast at 15 MMT for 2018/2019, reflecting lower production caused by poor rainfall and higher average temperatures. Australia is the world's third largest wheat exporter, but its exporters are expected to face stronger competition from Black Sea wheat traders, especially for feed wheat.

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