Australia Raises Wheat Output Forecast on Better Rains

Australia's government forecaster has raised its wheat production estimate for the current season by more than 3 million tonnes, citing better-than-expected winter rainfall across key growing regions.

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) now projects a wheat harvest of 29.9 million metric tonnes, up from its previous estimate. The upward revision adds supply to a global wheat market that has firmed in recent months, with prices touching their highest levels since early 2023.

ABARES also lifted its barley forecast by over 2 million tonnes to 16.4 million tonnes, and its canola projection by just over 1 million tonnes to 7.3 million tonnes. Growers had favoured these crops over wheat due to better expected margins.

Despite the upgrade, the wheat crop remains about 6 million tonnes below last year's record, partly because farmers sowed 11% less area. The expected harvest is roughly in line with the 10-year average.

Growing conditions were described as excellent in South Australia, Victoria, and southern New South Wales, but only average in Western Australia and poor in northern New South Wales and Queensland.

The season began with dry conditions, fears of fertiliser shortages, and the threat of a strong El Niño event. However, ABARES noted that winter conditions turned out much better than expected, and high fertiliser prices had a smaller impact than feared.

Harvesting is set to begin in October. Separately, ABARES projected declines of 22% to 34% in summer crops like sorghum, cotton, and rice due to low soil moisture and irrigation water availability.