by Agrimoney.com
Australia downgraded official wheat forecasts – but not by as much as analysts had expected, keeping record production and bumper exports in sight.
Official forecasters in the southern hemisphere's top wheat exporting country acknowledged "the loss of some crops" in eastern states "because of flooding and fungal disease", following persistent rains.
In New South Wales, the top producing sate this year, rains "started to cause significant problems from November, including substantial harvest delays, an increase in the prevalence of fungal disease and significant damage to grain quality".
Indeed, about half the New South Wales crop was downgraded to feed quality, with "most" of the Queensland harvest deemed of "feed and general purpose" use and, in South Australia, "sprouting, mildew infestations and fungal staining" causing some downgrades.
Record harvest
However, the officials at crop bureau Abares cut their overall crop forecast by 500,000 tonnes to 26.3m tonnes, still sufficient to beat the 26.1m-tonne record set seven seasons ago.
This in part reflected a 1.1m-tonne upgrade to 4.7m tonnes in the crop in Western Australia, usually the country's top producing state, but which suffered its driest ever year in 2010.
Furthermore, Abares kept its estimate for Australia's exports in 2010-11 at 16.0m tonnes, despite the strain that an east-focused, and late, harvest poses to grain logistics focused on the country's east coast.
'Time to recover'
The estimate were significantly higher than those of other analysts.
Rabobank last week pegged the harvest at 24.0m tonnes, adding that missed shipping opportunities, after heavy rains delayed the east coast harvest, and in some areas closed rail lines too, meant exports "will be constrained to just 14m-14.5m tonnes".
The US Department of Agriculture estimated output at 25.0m tonnes and shipments at 13.5m tonnes.
At Phillip Futures, Ker Chung Yang expressed "doubts" on the export forecast, saying it would be "difficult for [Australia] to keep up the momentum on exports as it will take time to recover from natural disasters".
At Commonwealth Bank of Australia, Luke Mathews said that Abares' estimates for New South Wales, South Australia and Victoria crops "still seem a little too high".
Feed vs malting
Abares also cut by 500,000 tonnes, to 9.3m tonnes, its forecast for Australia's barley crop, highlighting quality damage too from heavy rains.
New South Wales produced "more feed grade barley" than usual, while most of Queensland and South Australian crops were also of feed grade. In Western Australia, half the crop made the cut to malting grade.
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