Australia Cuts Wheat Production Forecast on Drought
Australia lowered its outlook for wheat production as dry weather in parts of the country’s east may curb yields in the world’s fifth-biggest exporter.
The harvest may total 24.2 million metric tons in 2014-2015 from 24.6 million tons estimated in June, the Australian Bureau of Agricultural and Resource Economics and Sciences said in a report. Production was 27 million tons a year earlier, it said. The crop is harvested starting next month.
Wheat in Chicago is heading for a second quarterly drop as the U.S. Department of Agriculture predicts global output will probably climb to the highest ever. Increasing supplies of crops worldwide are helping reduce global food prices, with a United Nations’ index slumping to a six-month low in July. Australia’s crops need rain during spring, which started this month, to meet production forecasts, Canberra-based Abares said.
“It was generally a good start, but there’s been dry and below-average conditions over many parts of the winter-cropping zone,” said Peter Collins, manager for agricultural commodities at the bureau. “It’s been variable, so you’re going to have mixed prospects from one region to the next.”
Futures fell 17 percent in the past year to $5.305 a bushel today on the Chicago Board of Trade. Prices have declined 8.1 percent this quarter, extending a 17 percent drop in the three months to June.
Western Australia’s wheat harvest, the country’s biggest, may total 8.4 million tons in 2014-2015, unchanged from a June estimate, the bureau said.
Source: Bloomberg
