Rains boost Australian wheat planting prospects, El Nino weather looms

By Naveen Thukral

SINGAPORE, April 11 (Reuters) – Australian wheat plantings are set for a strong start as better-than-expected rains in parts of the country’s grain growing regions have improved soil moisture, traders and analysts said.

After three years of all-time high wheat production, Australian farmers have started planting the crop this year amid forecasts of El Nino weather, which typically brings dry weather across large parts of the country.

“There are forecasts of dry weather and El Nino is quite likely,” said Phin Ziebell, an agribusiness economist at National Australia Bank.

“But we have had good rains in eastern and southern parts of the country.”

Cereal and oilseed crops across Asia are forecast to face hot and dry weather, with meteorologists expecting the El Nino weather pattern to develop in the second half of the year, threatening supplies and heightening concerns over food inflation.

Rains across New South Wales and Victoria states over the last two weeks have boosted soil moisture levels for planting, which lasts until May.

Australia, the world’s No. 2 wheat exporter, produced a record crop of close to 40 million tonnes in 2022/23, providing much needed food supplies to importers hit by disruptions following the coronavirus pandemic and Russia-Ukraine war.

Australia is expected to report record-breaking agricultural exports in the current financial year, after years of high rainfall boosted yields.

In Asia, Indonesia, China and Japan are key importers of Australian wheat with buyers in the Middle East taking higher grades of milling grains from the country.

The benchmark Chicago wheat futures Wv1 have lost around 14% of their value in 2023 on improved global production, although dryness in the U.S. Plains is reducing yield potential for the winter crop.

“At the moment it is looking very good, things are much better, given the dry autumn forecast,” said one Sydney-based grains trader.

Private and official estimates for the country’s 2023/24 wheat output range from 25 to 30 million tonnes.

Planting of barley and canola, also grown in the same season, are likely to benefit from recent rains.

Australia has reached an agreement with China to resolve their dispute over barley imports, Australian Foreign Minister Penny Wong said on Tuesday, the latest sign of improving ties between the countries.

(Reporting by Naveen Thukral; Editing by Sonia Cheema)

((naveen.thukral@thomsonreuters.com; +65-6870-3829; Reuters Messaging: naveen.thukral.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.