Key points

• Harvest is now underway for 2018-19 winter crop, a season which will likely go down as one of the most mixed in years. While eastern Australia has had a tough season, particularly in New South Wales and Queensland, Western Australia is on track for an above average season.
• Our latest forecast for Australian wheat production is 16.9 million tonnes, down from 17.4 million tonnes in last month’s estimate. By state, Western Australia is forecast to produce 9.1 million tonnes of wheat, 108% of the 10 year average of 8.4 million tonnes. On the other hand, we forecast that New South Wales will only see 2.1 million tonnes of wheat this season – just over a quarter of the state’s 10 year average production amid the worst season in decades. South Australia and Victoria will see below average crops, but nowhere near as bad as New South Wales and Queensland. We see South Australia harvesting 3.0 million tonnes of wheat and Victoria 2.4 million tonnes.
• Winter crop prices remain very elevated, although ASX wheat futures have come off their peak in the mid 400s range reached in late September. ASX wheat is now trading at around $415/t – still well above global benchmarks. East coast grain prices have probably found a ceiling at Western Australia prices (low-mid 300s) plus transport costs (in the order of $100/t), and the kinder summer outlook for the east will hopefully deliver better summer crops and pasture. However, should summer and autumn remain hot and dry, livestock producers in the east will need to have feed plans into spring 2019.

For further details, please see the attached report:

• In Focus Winter Crops: November 18 (PDF, 1mb)