June 13, 2014
Australia cuts 2014/15 wheat crop forecast as El Nino looms
Australia has trimmed its forecast for 2014/5 wheat production by almost 1% as dry weather curbs yields, and warned output could drop further if an El Nino strikes.
The world''s third-largest wheat exporter is expected to produce 24.59 million tonnes in the current season, down from a March estimate of 24.80 million tonnes, Australia''sofficial agricultural forecaster said.
Wheat production would still be the seventh-largest on record following last year''s bumper 27.01 million tonnes, but the Australian Bureau of Agriculture and Resource Economics and Sciences (Abares) cautioned that dry weather could cut yields.
"Sufficient and timely rainfall over winter will be critical to the development of winter crops, particularly in those areas where soil moisture levels are presently low," the bureau said. "Yields are likely to be lower than currently assumed if sufficient and timely rainfall is not received."
The forecast decline in wheat production comes even as the acreage devoted to the grain is expected to rise to a three-year high of 13.84 million hectares.
Strong Australian production will add to pressure on benchmark wheat prices, which have tumbled nearly 15% over the past five weeks as fears over global production have eased with favourable weather in the United States and an easing of unrests in Ukraine.
Abares cautioned that the impact of an El Nino, seen by most global forecasters as increasingly likely to arrive within the next few months, would be difficult to predict.
The El Nino- a warming of sea-surface temperatures in the Pacific- can trigger drought in Southeast Asia and Australia, as well as floods in South America, hitting production of key commodities such as rice, wheat and sugar.