Bloomberg News

Dry Weather in West Australia Seen Threatening Wheat Planting

May 15, 2012

Dry weather may curb crop planting in Western Australia, the nation’s largest wheat grower, on forecasts for little rainfall this week, according to the state’s largest grain handler CBH Group.

“It’s not going to rain for another week to 10 days, which is disappointing,” Max Johnson, manager of grain operations, said in a phone interview. “If it doesn’t rain, then some of the growers will stop seeding and wait for showers. If it doesn’t come, or comes too late, they might drop off altogether.”

The state, which produces 40 percent of the country’s total, had below-average rainfall in April and is forecast to stay dry in the next week, according to the Bureau of Meteorology. A smaller harvest may limit the 7.4 percent price slump in Chicago this year. Australia, the second-biggest exporter, may produce 25.7 million metric tons in the year starting July 1 from 13.7 million hectares (33.9 million acres), the Australian Bureau of Agricultural and Resource Economics and Sciences said March 6.

Rain is needed to improve planting conditions and development across most of the nation’s grain-growing regions, Luke Mathews, a commodity strategist at Commonwealth Bank of Australia (CBA), wrote in a note yesterday. The country produced a record 29.5 million tons in 2011-2012, according to Abares.

Wheat for July delivery gained 1 percent to $6.045 a bushel on the Chicago Board of Trade at 3:47 p.m. in Singapore. The price has dropped this year as favorable weather boosts crop prospects in the U.S., the world’s biggest shipper.

Planting Progress

Global inventories may fall 4.5 percent to 188.1 million tons in the year that ends on May 31, 2013, the U.S. Department of Agriculture said May 10. World production may fall 2.5 percent to 677.6 million tons.

About 4 million hectares may be planted to wheat in Western Australia this year from about 4.5 million, Johnson said by phone from Perth yesterday. The state harvested an estimated 11.7 million tons of wheat last season as output more than doubled from the previous year’s drought-affected crop, according to Abares. Total grain production was a record 15 million tons, CBH said Feb. 15.

About 40 percent of the crop has been planted in the Geraldton zone and a similar amount in Kwinana, Johnson said. Esperance has planted between 50 percent and 60 percent of the crop, while Albany’s progress is at 20 percent, he said.

Farmers in Australia need rain at this time of year to sow winter crops including wheat and canola.

“We are expecting around 7 million hectares with a reasonable start,” Johnson said referring to the state’s grain crop. “It might pull back 5 percent” if it doesn’t rain in the next couple of weeks, he said.

To contact the reporter for this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net


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