Western Australia 2021-22 wheat output seen hit by severe frost conditions

Western Australia wheat output scaled down over 6% on month. Output seen falling in Kwinana, Geraldton port zones. Western Australia 2021-22 wheat output seen up 15% on year. The recent severe frost conditions and lack of rainfall in parts of Western Australia is likely to damage the wheat crop in the province, the Grains Industry Association of Western Australia said in its September report. The association reduced its estimate for wheat output in Western Australia for marketing year 2021-22 (October-September) to 10.6 million mt, 6.2% lower from the 11.3 million mt pegged in August.

However, the output is seen 15.2% higher on the year, the report said. It had pegged the province’s wheat output in MY2020-21 at 9.2 million mt. Western Australia is typically the largest producer of wheat in Australia. “The recent severe frost events in the central grain belt have shifted attention away from the lack of spring rain, but the lack of useful spring rain north of the Great Eastern Highway and the lower rainfall regions is now likely to have more impact on reducing final tonnage in the state than the recent frost events,” the report said. The cuts in the wheat output estimates in the province come at a time when Australian wheat prospects have been on the rise since the last marketing year, after three-year devastating drought. The Australian Bureau of Agricultural and Resource Economics and Sciences, or ABARES, has pegged wheat output in Western Australia at 11.5 million mt in September, up from 10 million mt pegged in June.

The ABARES had also scaled up its estimate for the Australian output in MY2021-22 to 32.6 million mt from 27.8 million mt pegged in the previous report. However, the output is likely to fall more than 2% from MY2021-22. Australia is a key exporter of wheat and a likely fall in the output in the largest growing province may hit its shipments, traders said. ABARES had recently increased its estimate for Australia’s wheat exports for the MY2021-22 to 23 million mt from 21.8 million mt pegged in June. However, wheat exports are still seen 3% lower on the year. With the global wheat supplies seen dwindling, a potential reduction in the output in the region may also lead to an increase in Australia’s wheat export prices, traders added. The S&P Global Platts assessed FOB prices of APW wheat $2.25 lower at $318.5/mt on Sept. 22. According to the association, the cold temperatures during early September is likely to reduce the output, in worst-hit areas in the northern regions of Western Australia, by at least 50%. The cold temperatures and frost during early September may also impact grain yields for crops that are in the flowering stage. “In the lower rainfall regions, the soil profile has also dried out to a point where the capacity for crops to recover from the frost will be limited,” the report added. Wheat output in the Kwinana port zone is expected to fall to 5.8 million mt from 6.1 million mt pegged a month ago. Kwinana port zone is the largest wheat growing region in Western Australia. In the second largest producing region, the Geraldton port zone, output is seen declining to 2.2 million mt against 2.6 million mt seen a month ago.However, the output in the other port zones in the province are seen steady, the report said. In the Esperance port zone, output is seen at 1.4 million mt, followed by 1.2 million mt in the Albany port zone. In the Esperance port zone, the yield potential is seen above the average as the frost conditions are mild. In the Albany Port zone, which is recovering from the waterlogging may end up increasing its wheat production.

S&P Global Platts

Tags: Australia, price, wheat, output, ABARES