Thursday, 13 September 2012

Dry weather puts top wheat ranking in jeopardy


AUSTRALIA may lose its ranking as the world's No 2 wheat exporter in the next marketing year as dry weather threatens to reduce yields of the grain, the head of trading at Cargill Australia said yesterday.

Poor rainfall in Western Australia is expected to cut national production in the year starting October 1 by about a quarter from last year's bumper crop to 22.5 million tonnes, according to government forecasts this week.
Cargill trading manager Will Reid forecast wheat exports would fall to 18-19 million tonnes in 2012-13, down from a record 24.5 million tonnes in 2011-12 and substantially below the 21.5 million tonnes official forecast by the Australian Bureau of Agricultural and Resource Economics and Sciences. "Who will be the No 2 exporter is between Australia and Canada, but it's probably more likely to be Canada," Mr Reid said.

Despite the reduced volume forecasts, exporters can expect strong returns from grain.

Wheat prices have jumped 35 per cent on the Chicago Board of Trade since the end of May, fuelled by fears of a shortfall of world supplies, as drought has devastated crops in two of the world's largest producers of the grain -- Russia and the US.

Front-month CBOT wheat for September delivery closed 0.8 per cent higher at $US8.67 a bushel after the US Department of Agriculture this week lowered its estimate for world wheat production to come in 5.2 per cent below last year's level.

Original Article Here

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