By Andrew Whitelaw | Source: ABARES
ABARES released their September Australian crop on Tuesday morning. The report unsurprisingly had some major upward revisions since the prior release in June. It is now forecast that Australia will have its largest winter crop on record.
At the point of ABARES publishing their report the growing season for 2016/17 had been close to excellent across much of Australia, with the exception of some areas of NSW and the Esperance port zone which had water logging issues.
The wheat crop is forecast to reach 28.07mmt, the second highest production in Australia. The largest wheat crop was 29.90mmt in the 2011/12 crop (figure 1). Although not a record crop, it is still a very large crop at nearly 6mmt higher than the ten-year average, meaning at these forecasts you could lose the entire SA crop and still be above average!
The increase in productions comes from large yield increases across the board, with even higher yields than 2011/12 at 2.17mmt versus 2.15mmt (figure 2) on average across the country, although plantings are around 7% lower than in 2011/12.
The overall picture presented by ABARES is pretty promising and this can be clearly seen with the increases in area and production across all major commodities (figure 3). In this chart it is interesting to note that increase in area devoted to niche crops, and the stand out is the 24% increase in chickpea acreage. There are also some major increases in yield estimates for faba beans (+49%) and field peas (+53%).
The unfortunate aspect of creating such a comprehensive report which is reliant on weather, is that shortly after you publish the outlook can drastically change. The recent weather and the new forecasts are pointing to heavy rainfall across much of the east coast, and we would expect an impact to yield potential. The niche nature of some of the pulses, can generate high degrees of volatility when supply issues arise.
The crop is likely to be large, and growers need to create a marketing plan for the coming months. The grower sold percentage is well below average, and if growers sell in large tranches at harvest there will be pressure on basis levels.
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