NSW grain production estimates continue to decline as forecasters factor in the dry start to spring and recent frost damage.
ABARES cut its forecast for the Australian 2017 wheat crop to 21.6 million tonnes, down 2.5 million tonnes from the June estimate and 38 per cent below last year’s record harvest.
They said Australia’s total winter crop production is expected to decline by 39 per cent to 36.3 million tonnes, reflecting the expected decline in average yields from the exceptionally high yields last year.
Wheat production in NSW is forecast to fall to 6.3 million tonnes, down 44 per cent from last year and barley is projected at 1.5 million tonnes, ABARES said.
The average yield for wheat is expected to fall to 1.9t a hectare because of the drier than normal winter and early spring weather, as well as recent frost damage.
ABARES said poor yields through north west and central west NSW will be partly offset by average to above average yields in the southern and eastern cropping areas.
NSW canola production was pegged at 620,000t, down by aanout a quarter on last year, with higher plantings offsetting lower yields.
Large volumes of wheat and barley are flowing north into southern Queensland from central west and south west NSW.
Farmers from the Riverina and central west NSW are gradually releasing on farm grain stocks from last year’s harvest as end users chase coverage.
Grains prices continued to move higher last week. New crop Australian Premium White (APW) into Newcastle jumped by $15/t to $318/t port while Port Kembla was $7/t higher at $303/t. Port Kembla feed barley gained $4/t to $257/t.
But the strength in the southern Queensland markets means the on-farm prices remain a large premium to port prices. On farm values through the central west are $230/t to $240/t for wheat and above $210/t to $220/t for barley.
The USDA report last week didn’t deliver many surprises. Russian’s wheat crop was raised and Australia’s crop was lower with the drought. World wheat production for 2017-18 was edged higher by 1.7 million tonnes to 745 million on the back of a 3.5 million tonne increase in the Russian crop.
But, global markets seem to have digested the massive Russian wheat harvest, with world prices edging higher over the past fortnight.
High Australian wheat prices is already eroding wheat exports into Asia, as buyers switch to cheaper Black Sea supplies. Wheat exports from the Black Sea region to Asia, reportedly, climbed to an all-time high last month as buyers took advantage of cheaper prices at the expense of Australian wheat.
Additional Black Sea export capacity and improving quality is also making it easier for Asian buyers to incorporate more wheat from Russia and Ukraine.
Both Russia and Ukraine have been investing in new ports, rail lines and storage capacity in recent years.
