In 2022, Australia is on track to produce near-record wheat for the third year in a row, as excellent weather promotes planting across its grain belt, alleviating concerns about tight global supplies.
The recent decision by India to limit exports, as well as bad weather in the United States, have heightened concerns about food grain supplies.
Benchmark Wheat futures on the Chicago Board of Trade hit an all-time high of $13.64 a bushel in March. As of 0307 GMT on Thursday, the market was up 0.4 percent at $10.45-1/4 a bushel.
According to estimates from brokerage IKON Commodities, farmers in Australia, which became the world’s second largest wheat exporter in 2021/22, have nearly completed this year’s wheat planting on about 14.45 million hectares (35.7 million acres), an all-time high, encouraged by red-hot prices and ideal growing conditions.
Wheat was grown on about 14 million hectares last year, according to the report.
Despite the fact that it is still too early to predict the full size of the 2022-23 crop, which will be harvested at the end of the year, analysts and traders are forecasting total output of around 30-35 million tonnes, which is not far off from the record-breaking 2021-22 harvest of more than 36 million tonnes.
“Is it possible that we’ll have a crop of more than 30 million tonnes for the third year in a row? I believe we have a decent chance “Phin Ziebell, an agriculture economist at Melbourne’s National Australia Bank, agreed.
“Farmers are in good financial shape, and the weather is helping them out.”
According to the Australian Bureau of Agricultural and Resource Economics and Sciences, the country’s wheat output has averaged 24.8 million tonnes per year during the last ten years (ABARES).
While rainy circumstances on the country’s east coast, which is famed for its high-protein hard wheat, have assisted planting, opportune rainfall in Western Australia have also boosted sowing.
Global wheat output, on the other hand, is expected to fall to 774.83 million tonnes in 2022-23, down from 779.29 million tonnes a year ago, according to USDA statistics.
According to dealers, Asian customers are significantly reliant on Australian wheat, with China emerging as the largest importer this year. Indonesia, the world’s second-largest wheat customer, as well as Japan and South Korea, are among the region’s major importers.
This year, Australian farmers have benefited from all-time high wheat prices, as well as record output.
This week, Australian Premium White (APW) was estimated at $440 per tonne, Free on Board, Western Australia, somewhat lower than a recent high of $460 per tonne.
One Singapore-based trader said, “We expect business to start sooner than normal (in) August-September period.”