Australia lifted its wheat export forecast by nearly 3m tonnes, and hiked its forecast for canola shipments to a record high, as it lifted its harvest estimates – although issued some caution on crop quality.
Abares, the official Australian crop bureau, raised by 2.90m tonnes to 27.40m tonnes its forecast for the country’s wheat exports in 2022-23, on an October-to-September basis.
The upgrade, which took the total to 105,000 tonnes from last season’s record high, reflected an increased harvest estimate, with the benefit to yields from ample rains viewed as more offsetting crop losses.
“Record rainfall in October led to significant flooding events in large parts of eastern Australia,” Abares said.
“Despite crop losses due to flooding, the overall impact on production for these states is forecast to be offset by exceptionally high yields in areas that are not impacted.”
The estimate for Australia’s ongoing 2022-23 wheat harvest was lifted by 4.33m tonnes to 36.57m tonnes, taking it 220,000 tonnes above last season’s all-time high.
However, Abares acknowledged that the rains had eroded specifications for wheat and other crops, saying that “the more widespread effects of the heavy rainfall will be harvest delays and quality downgrades to winter crops”.
In eastern states in particular, grain and oilseed quality has “been mixed following ongoing wet conditions during spring”, the bureau said.
Nonetheless, exports would be supported by prices expected to remain below those of some other major exporters, including the US.
Australian wheat “remains competitively priced compared to the United States and Argentina due to dry conditions affecting production in both major exporters.
“For the remainder of 2022-23, Australian wheat prices are expected to continue trading below the world indicator price,” for which Abares uses US hard red winter wheat, “because of drought conditions in the major winter wheat-producing regions in the US”.
Volume up, price down
For canola, the bureau lifted its estimate for 2022-23 production by 690,000 tonnes to 7.33m tonnes, a record high.
The export forecast was raised too, by 690,000 tonnes to 6.23m tonnes, taking it ahead of last season’s record of 5.56m tonnes.
However, “the value of canola exports is forecast to fall because Australian exporters are expected to receive lower prices due to stronger competition from Canada, as the world’s largest canola producer rebounds due to improved growing conditions”, Abares added.
Australian canola prices were forecast averaging Aus$780 per tonne this season, down by Aus$120 per tonne year on year, and a downgrade of Aus$20 per tonne from the previous forecast, issued in September.