The gap in wheat fortunes between the southern hemisphere’s top two growing countries widened even further as Australia’s top producing state received a harvest upgrade, while Argentina’s crop was downgraded again.
In Western Australia, “the mild finish to the season and rain in late August and early September, have combined to finish off a near-perfect season” for grains, blessed by ample rainfall, the Grain Industry Association of Western Australia (Giwa) said.
Although winter crop harvesting has been delayed by cool and wet weather, “what has been harvested has exceeded expectations by several hundred kilogrammes per hectare in nearly all cases for canola and wheat”, the association said.
Giwa raised by 820,000 tonnes to 23.98m tonnes its forecast for this year’s overall Western Australian harvest – taking the estimate within 50,000 tonnes of last year’s record high.
The revision included an increase of 550,000 tonnes, to 12.60m tonnes, in the estimate for the 2022 wheat harvest.
‘Bad to worse’
The upgrade came hours after the Buenos Aires grains exchange cut to 12.4m tonnes, a seven-year low, its forecast for the ongoing 2022-23 Argentine wheat harvest, citing damage from frost.
On Wednesday the Rosario grains exchange cut by 1.9m tonnes to 11.8m tonnes, its estimate – implying a near-halving from last year’s bumper 23.0m-tonne result.
The Rosario’s latest downgrade, which followed a cut in the forecast to 13.7m tonnes two weeks ago, also reflected growing evidence of crop damage from low temperatures, on top of the stress caused by dryness which the exchange termed “the most serious in eight years”.
Some central growing regions have been left with rain shortfall of a “phenomenal” 200mm-300 mm (8-12 inches) since the start of July, compared with the 30-year average, the exchange said, meaning that wheat crops “started badly and continued to get worse”.
The exchange cautioned that further downgrades may yet follow, with its latest estimate not including damage from November 1 frost in Buenos Aires, the top growing province.
“The current scenario for Argentine wheat is going through enormous uncertainty and there may continue to be new cuts” to estimates.
Corn vs soybeans
The exchange also blamed the harsh weather for a cut of 100,000 hectares, to 7.9m hectares, in its forecast for Argentine corn sowings for 2022-23.
“In addition to the planting problems posed by very restricted moisture, crops in the provinces of Santa Fe, Buenos Aires, Cordoba and Entre Rios have faced damage from low temperatures,” it said, adding that some fields “must be resown”.
The lost area will be switched to soybeans, which can be later planted, for which the sowings forecast was lifted to 17.1m hectares.
In Western Australia, Giwa reported canola as the state’s “absolute standout” crop this year, with the production forecast for the oilseed lifted by 170,000 tonnes to a record 3.98m tonnes, well ahead of the 3.13m tonnes reaped in 2021.
The association attributed the strong performance to the “good early start and slow finish” to development allowed by the weather conditions, besides to improved farming methods.
However, Giwa did acknowledge some setback to wheat from the recent wetness, saying that the damp conditions are “now beginning to cause trouble with lodging, head loss and expected downgrades in quality if the rain persists.
“Grain loss from hail across the central and southern regions in the last two weeks is starting to add up.”
Wetness is too cutting expectations for the eastern Australian crop, leading Rabobank last week to caution of losses to both harvest quality and quantity.
“Significant east coast flooding and excess rainfall is expected not only to cause considerable downgrades to crop quality, with substantially more feed around year-on-year, but also to reduce tonnage due to washed out fields,” the bank said.