Rabobank forecasts $19.75 billion grain harvest, underpinned by big canola crop

Grain growers should pocket a record $20 billion this harvest, according to Rabobank.

Canola is providing a golden backdrop to winter crop value this harvest. Picture: Zoe Phillips

This season’s winter crop is expected to produce a record $19.75 billion in value, according to Rabobank.

In its latest Agribusiness Monthly report, the bank has forecast the winter crop at 52.87 million tonnes, 25 per cent higher than the five-year average.

Aside from the good yields, the November report said current high prices for wheat, barley and canola were expected to remain elevated for the rest of the year and would push the total value of production to just shy of $20 billion.

Rabobank grains and oilseeds analyst Dennis Voznesenski said canola production was expected to be a record 5.2 million tonnes.

Canola prices had risen 12 per cent month on month and were now 56 per cent higher than a year ago.

“We see prices being supported moving into Quarter 1 2022, followed by a decline as we move into mid-year, when we will likely start to see improved canola production prospects for the northern hemisphere,” Mr Voznesenski said.

For wheat, Mr Voznesenski said strong export demand and the Australian dollar remaining below 75 US cents should see track prices for Australian Premium White wheat average between $330 a tonne and $360 a tonne.

The US Department of Agriculture’s shock six million tonne decline in global wheat stocks forecast last month have underpinned Chicago Board of Trade futures.

Rabobank is forecasting CBOT wheat futures to average 725-750 US cents a bushel (A$357-$370 a tonne) during the next 12 months.

According to CBA, CBOT December futures prices are currently sitting on 781 US cents a bushel, or $A385 a tonne.

“Dwindling global stocks are expected to keep rices in the US 700 cents range through 2022 and expectation of relatively good southern hemisphere harvest should help keep rices from rising much more,” Mr Voznesenski said.

“The threat of the re-emergence of La Nina, which could lead to drought over the US central plains and to firmer price, will however keep markets nervous until at least February, 2022, and present possible upside.”