Wheat forecast: Favourable conditions in eastern Australia push yield estimates higher

One wheat forecast has lifted national yield prospects up significantly. Here’s what volumes are expected to hit.

IKON Commodities has lifted its national wheat estimate by 920,000 tonnes, compared with its last update, to 30.23 million tonnes. Picture: Zoe Phillips

NATIONAL wheat production estimates have now topped 30 million tonnes, as one forecaster expects last week’s rain to have a big impact on crop yield potential across eastern Australia.

One forecast, released by IKON Commodities on Monday, lifted estimates a massive 920,000 tonnes — compared with their last update — to 30.23 million tonnes.

The prediction is also 16.26 million tonnes higher than last year’s volumes.

According to IKON, NSW production is expected to reach a record high of 12.5 million tonnes, with the possibility of further climbs.

However, this month’s US Department of Agriculture World Agricultural Supply and Demand Estimates report, released late last week, is more sober, keeping Australian wheat production estimates at 28.50 million tonnes.

That is unchanged from their predictions last month.

And forecasts from financial services network StoneX, released yesterday, have put Australia’s wheat production at 28.71 million tonnes – above their September volumes of 27.47 million tonnes.

For Victoria, rain falling on parts of the state last week has not only lifted confidence in regions, but is predicted to have significant economic impacts.

In the southern Wimmera, 25mm of rain hitting grain growing regions in one day has been described as a “once in a 10-year event”, according to the Wimmera Development Association.

“Especially in the first two weeks of October, that is when it has the most impact,” WDA executive director Chris Sounness said. He said rain last week would be worth $100 million to the region.

“Confidence in the region is now huge during these tough times. It has given retailers and hospitality industries a boost,” Mr Sounness said.

He said confidence was also high in the agriculture industry. “Hopefully yields turn into money – and people reinvest in housing. We hope in 2020 and 2021 that we see people reinvesting in the region.”

Australian wheat futures dropped late last week, the Commonwealth Bank reported.

On Friday, January ’21 ASX east wheat prices closed at $312, compared with $316 on the Thursday.

“New post‑planting highs, on a day with a higher Australian dollar and lower global prices, seemingly made selling irresistible,” Commonwealth Bank report author Tobin Gorey said.

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