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ABARES raises 2021-22 Australian wheat output to record 34.4 million mt

Highlights

New South Wales expected to harvest largest wheat crop in 2021-22

MY 2021-22 Australia wheat acreage seen at 13 million hectares

Australian wheat output is seen rising touching a fresh record in marketing year 2021-22 (October-September) due to continued rainfall in vast areas of the country, the Australian Bureau of Agricultural and Resource Economics and Sciences has said.

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The country's wheat production is expected to reach 34.4 million mt, up from 32.6 million mt forecast in September, ABARES said in a quarterly crop outlook report released Nov. 30 in Australia.

The forecast for MY 2021-22, however, was also slightly higher on the year. The agency had pegged Australia's wheat output in MY 2020-21 at 33.3 million mt.

Wheat output is expected to be the highest in New South Wales, followed by Western Australia, ABARES added.

For New South Wales, the output is seen rising to 12.2 million mt, up from 11.1 million mt projected in September. In Western Australia, wheat production is seen at 11.7 million mt against 11.5 million mt in September.

The acreage under wheat in Australia for MY 2021-22 was pegged at 13 million hectares.

However, continued showers are seen hitting the protein quantity of the crop in most parts, ABARES said.

"Heavy rainfall in November in eastern states and South Australia has delayed crop harvests and is likely to result in quality downgrades of crops in some areas," it said. "Damage to crops is expected to be the worst in New South Wales where most cropping regions are set to have one of their wettest November on record. Early receivals in New South Wales have pointed to lower quality wheat in some regions."

Premium wheat prices rise

With the supply of premium wheat quantity seen tightening, export prices of APW wheat have reached a record high.

The export price of Australian wheat rose $26 during the month to record high of $365/mt on Nov. 29, according to S&P Global Platts assessments. Prices were also over 40% higher on the year.

However, the prices of ASW wheat have plunged as arrivals of standard wheat are seen rising.

The FOB prices of ASW white wheat fell nearly $15 to $317.50/mt on Nov. 29. ASW wheat prices rose over 24% on the year.

Australian wheat prices rose on the year due to a rally in demand for the crop amid expected tightening global supplies.

The spread between APW and ASW prices have widened to $47.59 as of Nov. 29 from $7 a month ago.