Australian 2020-21 wheat harvest more formidable than expected: ABARES

New Delhi — Australia's wheat production for the 2020-21 crop year is set to break multiyear records after the country's Department of Agriculture bumped up the harvest outlook again for a fourth consecutive time, hitting a level not seen in at least 31 years.

Australia's wheat harvest is expected to hit 33.3 million mt in 2020-21 (April-March), led by favorable weather conditions missing from the last three marketing seasons, the Australian Bureau of Agricultural and Resource Economics and Sciences said in its quarterly crop report released Feb. 16.

Production will be up 7% from a previous estimate and 120% higher year on year, according to the report.

New South Wales forecast to register the largest increase, emerging as Australia's top wheat-producing state after a gap of five years, toppling Western Australia in the process, with production expected at 13.1 million mt, a more than fivefold increase year on year.

New South Wales' production is attributed to a record high yield of 3.45 mt/ha, 72% above the 10-year average to 2019-20, ABARES said.

Western Australia is expected to produce 9.5 million mt in 2020-21, up 64% year on year.

Spotlight back on Australian wheat

Grain markets are closely following Australia's resurgence on the global scene, after grain export curbs in Russia and weather concerns in Argentina, both major competitors to Australian wheat in Southeast Asia.

Australian wheat prospects took a major hit in the last three years due to a prolonged drought that started in 2016, which took the country out of a race to dominate the Southeast Asian market, eventually won by suppliers in the Black Sea region.

The spotlight on Australia has only intensified since the arrival of China as a major buyer of global grains, particularly corn and wheat; and despite some trade tensions between the two countries, data has confirmed bilateral relations have yet to hurt their wheat trade.

China booked around 800,000 mt of wheat from Australia in December, according to customs data.

By the end of January, total Australian wheat shipments to China should be over 1 million mt in 2020-21, a source said.

"To put that into context, according to ABS statistics over the past five years that include bulk and container shipments, wheat to China for the October-January period averages around 250,000 mt, and the previous largest amount was 814,000 mt in 2004-05," according to James Maxwell, manager at Australian Crop Forecasters. "So current wheat exports to China are at record pace -- 257% above average and 11% above the previous record."

Australia's 2020-21 wheat marketing year will run from October 2020 through September 2021.