After the recent rains on the east coast of Australia interrupted a three-year drought, analysts are now increasing their estimate for the 2020/21 wheat harvest there by 25%.
The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) currently believes that the next harvest in the country could be 26.7 million tons. That would be 5.4 million tons or 25% more than last season. The growing conditions in the east and south of Australia are currently excellent for grain stocks.
If this forecast is fulfilled, this will have a negative impact on world market prices because Australia is one of the ten largest exporting nations for wheat worldwide.
The weather conditions have changed drastically on the east coast. At the end of last year, a three-year drought ended with many bush fires. Now, heavy rainfall could fill the floors with water and put out the fires. This encouraged farmers to expand their acreage.
Wheat was sown on almost 13 million hectares. This is 8% more than analysts had expected in March.Wet weather conditions are expected in the next three months, which is why ABARES now expects higher yields.
The barley harvest will also be larger in Australia in 2020/21. The experts expect 10.6 million tons or 15% more than in the previous year. In March, 9.1 million tons were still expected. The export prospects for this are bleak, however, as China, usually the largest buyer, imposed a punitive tariff of over 80% on Australian barley in May.
Source
Hansa Terminhandel GmbH
