Thursday, 7 April 2011

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West Australian Drought Could Crimp 2011-12 Wheat Output - Rabobank

  • Thursday, 7 April 2011
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  • Drought and parched soils in Western Australia--historically the source of up to 40% of national wheat output--could again crimp production this year, reducing the chance of a record Australian crop, Rabobank Australia said.

    With the winter crop planting window to open later this month in Western Australia, most of the cropping districts will need favorable and timely rainfall and below-average temperatures to fully replenish soil moisture levels, Rabobank analyst Tracey Allen said in a review of the seasonal outlook.

    While Australian wheat production surged 20% in last crop year ended March 31 to 26.3 million metric tons, output in Western Australia slumped 42% to 4.7 million tons, or just 18% of national output, according to the government's chief commodities forecaster, the Australian Bureau of Agricultural and Resource Economics and Sciences.

    Abares forecast national wheat output this crop year at 24.3 million tons. It didn't estimate Western Australian production, though it would likely have been around or above a five-year annual average of 7.3 million tons.

    After annual national domestic consumption of around 6.0 million tons is met, the balance of output is available for export, usually making Australia a major supplier to the global trade. Western Australia can be a major global supplier in its own right. When the state's production reached a record 11.1 million tons of wheat in 2003-04, it was the source of about 10% of the year's global traded wheat.

    Southwest Western Australia experienced its driest year on record in 2010, and it has since missed out on the record rains that have fallen in many other places in Australia this year, including grain-growing areas in the eastern states.

    For much of the eastern states, soil moisture is at capacity, which raises the possibility that more rain in the next two months could delay plantings, particularly for other winter crops such as canola and pulses, she said.

    The risk that La Nina conditions in the Pacific Ocean could return in 2011-12, bringing more abnormally heavy rains to the region, also weighs on the east coast grain outlook, she said. The Bureau of Meteorology said Tuesday that the warming of subsurface temperatures in the Pacific Ocean indicates that the La Nina weather event is weakening and in its final stages, but that signals from atmospheric indicators were less certain.

    (Source: http://www.indiainfoline.com/Markets/News/Commodities-Buzz-West-Australian-Drought-Could-Crimp-2011-12-Wheat-Output-Rabobank/3638399457)

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