Bloomberg News

Western Australia Set for Dry Weather, Curbing Crop Prospects

July 25, 2012

Grain-growing regions in Western Australia, the nation’s biggest wheat producer, will probably remain dry this week, threatening to curb production prospects as hot conditions harm crops from the U.S. to Europe.

No rain is forecast in the state’s crop areas in the four days to July 29, the Bureau of Meteorology said. An eight-day outlook shows grain regions may get between 1 millimeter (0.04 inch) and 10 millimeters with as much as 25 millimeters expected along the coast, a bureau weather model shows.

Corn and soybeans surged to records this week and wheat climbed 17 percent this month as the worst drought since 1956 scorches fields in the U.S. and heat waves wither crops in Europe. A drier-than-normal August to October is likely for central parts of Western Australia as an El Nino event, which can parch the country’s east, may develop this year, the bureau said July 24. Global food prices will rebound after tumbling in the second quarter, the United Nations said July 5.

“It’s been dry for quite some time,” said Michael Creed, an agribusiness economist at National Australia Bank Ltd. “It’s got a rather ordinary subsoil moisture profile so it doesn’t bode too well for crop prospects.”

Most of Western Australia had below-average rainfall from April to June and was exceptionally dry in July, said David Jones, the Melbourne-based head of climate monitoring and prediction at the Bureau of Meteorology.

East Coast

Southern areas of New South Wales, the second-biggest wheat grower, may get as much as 10 millimeters of rain to July 29, according to the bureau. Parts of Victoria may get between 10 millimeters and 25 millimeters, it said.

“It’s promising considering dry weather was forecast for certain parts of New South Wales and Victoria through this period,” Creed said by phone from Melbourne today.

Australia may produce 24.1 million metric tons of wheat in 2012-2013, 6.2 percent lower than an earlier estimate, on concern dry weather would curb plantings, the Australian Bureau of Agricultural and Resource Economics and Sciences said June 13. Output was a record 29.5 million tons in 2011-2012 as La Nina- linked rains boosted yields on the east coast.

Australia is the world’s second-biggest wheat exporter after the U.S., according to U.S. Department of Agriculture data.

On July 23, corn reached an all-time high of $8 a bushel, soybeans set a record $16.915 a bushel and wheat traded $9.4725, the highest prices since August 2008.

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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