Australia's wheat output in the year to June 2013 is likely to be almost 4 percent lower than the government's March estimate of 26 million tonnes and more than 15 percent below last year's record-large production as dry weather threatens yields. The country is estimated to produce 25 million tonnes of wheat in 2012/13, according to a Reuters survey of 10 analysts, as farmers in the world's second largest exporter wrap up planting later this month.
A crop of 25 million tonnes will be close to average yields in Australia but any further cut in crop estimates could support the benchmark US wheat, which has lost almost 15 percent since hitting an eight-month high of $7.22 a bushel on May 21. Recent rains in drought-hit parts of Russia and pressure from the US winter crop harvest have eroded wheat prices, already weighed down by a risk-averse sentiment in financial markets amid the euro zone debt crisis. Although rains last week in high-protein wheat producing eastern region of Australia have improved crop conditions, top growing Western Australia continues to remain dry, forcing farmers to seed wheat in the dry soil. "On the east coast, we are looking at a very good subsoil moisture profile, and rain outlook over the next three months is quite positive," said Michael Creed, agribusiness economist, National Australia Bank said. "It looks like continued dryness in the coming three months (for Western Australia)."
Australia is a leading grains supplier to Asia's biggest importers such as Indonesia, Japan, China and South Korea, selling 21.5 million tonnes in 2011/12, according to the US Department of Agriculture data. The country is likely to have 8.3 million tonnes of wheat in closing stocks at the end of the marketing year on September 30, down from nearly 9 million tonnes last year, but much larger than the average stockpile of around 5-6 million tonnes seen in earlier years, the poll showed.
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