In focus: Wheat Market Update July 2015
NAB Agribusiness has revised its national wheat crop forecast up to 21.6 million tonnes for this season, with 23 million tonnes possible contingent on good spring rain in key wheat regions.
- Global wheat markets have been somewhat volatile of late, partly in response to varied and stormy weather conditions in the US. Nonetheless, the USDA forecasts that total global wheat supply will increase in 2015-16, suggesting little upside for USD prices for the remainder of this year. Locally, we expect that the falling AUD will provide support to local prices. Overall, our forecast is for local prices to increase 5.9% in AUD terms in 2015-16.
- Australian wheat growers endured a somewhat nervous start to the planting season, with autumn rainfall patchy and below average in many regions. Better rainfall in the past month has improved confidence in some areas but challenges remain, compounded by the presence of El Niño since May this year.
- In June we foreshadowed the risk that El Niño will cause a significantly smaller Australian wheat harvest than last year, suggesting that a national crop of 20 million tonnes or lower was possible. In this report we present an upward revision to this forecast, based on better conditions in New South Wales and South Australia. State by state yield and production forecasts are shown to the right, with a total national production forecast of 21.6 million tonnes in 2015-16. It is important to note that timely spring rains should push yields higher and could precipitate a national harvest of around 23 million tonnes. This is still somewhat more pessimistic than ABARES’ forecast for a harvest of 23.6 million tonnes this season.
For further analysis download the full report.