Australian Wheat Crop Rebounds at Crucial Time for Global Supply

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessAustralian Wheat Crop Rebounds at Crucial Time for Global SupplyProspects for Australia’s upcoming wheat crop are turning more optimistic, helping to buffer an increasingly grim global supply outlook for the grain.Author of the article: You can save this article by registering for free here. Or sign-in if you have an account.n6oz1ni1{tc]md(x]jvzgn1(_media_dl_1.png Australia Department of Agricult(Bloomberg) — Prospects for Australia’s upcoming wheat crop are turning more optimistic, helping to buffer an increasingly grim global supply outlook for the grain.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountWell-timed rain across major growing regions in the eastern states of New South Wales, Queensland and Victoria have buoyed the outlook, prompting many analysts to upgrade their initially dire forecasts for the 2026 crop. In addition, fears of shortages of fertilizer and fuel driven by the war in Iran have eased. In May, Rabobank projected the wheat crop could come in as low as 21.3 million tons, down more than 40% on the previous year. Now, the bank predicts it could come in as high as 30 million tons. That’s smaller than last year’s 35.8 million tons, but still above the 10-year average for Australia’s wheat production. Bendigo Bank Agribusiness’ revised forecast is similar at around 30 million tons, with a potential upside of up to 33 million tons.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againAustralia is one of the world’s largest grain exporters, sending significant volumes to Southeast Asia and the Middle East. The upgrade to its crop forecast comes at a critical time as the global outlook for wheat supply worsens, weighed down by disruptions to shipping in the Black Sea and heat waves across the Northern Hemisphere. The situation sent benchmark Chicago wheat futures to a two-year high in July.With exports from other grain-producing nations constrained, Australia could help fill the gap for major importers such as Indonesia, the Philippines and potentially China. Julia Hausler, a farmer in northeastern Victoria, said she would never have expected to be looking at such a strong crop if you’d asked her earlier this year. At the time, expectations for severe heat and dryness driven by the El Niño weather phenomenon and the Iran war constraining fuel and fertilizer supply had her fearing the worst.But unusually strong and consistent rainfall in the first six months of the year has set her family’s farm up for a strong crop, while the war’s impact on farming inputs is less than they had feared. Australia diesel prices have fallen by about a quarter from their April peak and fertilizer costs have eased globally.“We’re tracking quite well with the challenges that have been thrown at us,” she said. “The only challenge you have now is the prices are not reflecting the rest of the world’s sort of shrinkage situation.”Bendigo Bank Agricultural Analyst Rod Baker said the improving outlook in Australia’s wheat crop has helped put downward pressure on US wheat futures, along with the large supplies carried over from the previous year. Prices this week neared a one-month low.However, shipments from the Black Sea have been severely impacted by a recent escalation in the war between Russia and Ukraine, two of the biggest global suppliers. Both have attacked each other’s port infrastructure, limiting exports for at least the short term.Dennis Voznesenski, agricultural economist at the Commonwealth Bank of Australia, said new corridors may be found to export wheat from the region, but longer delays at damaged ports could prompt buyers to seek out alternative sources. “If the Black Sea genuinely remains very constrained in their exportability, they’ll be looking very closely everywhere else,” he said.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.Listen and follow The Bloomberg Australia Podcast on Apple, Spotify, YouTube or wherever you get your podcasts. At the same time, wheat crops across the US, Canada and the European Union have been impacted by significant heat waves, potentially reducing supply and quality among other major producing nations. In France, output is expected to drop as a result of extreme heat, while planted acres in Canada are down on the previous year.Despite the growing optimism among Australian farmers, one major unknown lies ahead. A significant El Niño is still forecast to impact the country in the second half of the year, historically bringing high heat and little rainfall at a critical moment in the crop-growing cycle.Some farmers said there has already been enough rainfall this year for crops to mature without the usual spring showers, while others are more worried about the heat risk. Wheat is typically harvested beginning in October. Arthur Gearon, a farmer in Queensland, said he had used an artificial intelligence application to calculate the chances of rain going forward and didn’t like the results. He’s looking to clear some of his wheat fields in the hope of planting sorghum over summer instead.“We actually get a better summer than average in these sort of patterns,” Gearon said. “So I’ll abort the crop if need be and I’ll go for sorghum. It’s more profitable.”To get Bloomberg’s Business of Food newsletter in your inbox, sign up here. Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.