Aussie floods boost cattle hopes, but not sorghum

US farm officials ditched hopes of a rise in Australia's sorghum harvest, cautioning that last month's heavy rains while credited as a net benefit to sugar crops, and a spur to cattle prices - may have come too late for the grain.

The US Department of Agriculture's Canberra bureau slashed to 1.9m tonnes, from 2.4m tonnes, its estimate of the 2012-13 sorghum harvest in Australia, the third-ranked exporter of the grain after Argentina and the US.

The downgrade, which put a year-on-year decline of 19% in Australian sorghum output on the cards, reflected sowing setbacks caused by the dryness and record temperatures which preceded the inundations in the second half of January.

It followed a caution from farm officials in New South Wales, one of the country's two sorghum growing states, that plantings had fallen well short of previous forecasts.

Other options

In Queensland, the other sorghum-growing state, "a severe lack of summer rainfall" delayed plantings, the USDA bureau said, noting that only 5% of expected sowings had been completed by January.

And some of what has been sown, in both states, "suffered from a lack of rain during the early stages of growth".

While Australia did receive heavy rains over the last two months of January, this came late in the sorghum sowing season and "it is likely that many growers will plant corn, sunflowers, mungbeans or chickpeas instead", the bureau said.

Better prospects

The downbeat comments contrast with ideas that the rains had, overall, helped growers whose crops had not been flooded out.

"With the exception of the horticultural sector, the rain event will be positive for agricultural production," Luke Mathews at Commonwealth Bank of Australia said.

"Australian sugarcane production will benefit, on balance, from the increased moisture," with cotton yields also supported in many areas.

Adam Kay, chief executive of industry group Cotton Australia, said: "While not as large as last year's record yield, this year's cotton harvest is still expected to be a bumper crop.

"Forecasts for 2013 are for a 4m-bale crop with an export value of $2bn."

Cattle rally

However, livestock producers looked the main beneficiaries, after the rains boosted prospects for pasture, encouraging restocking.

"Local cattle prices, the eastern young cattle index, jumped 6.6% higher last week to be the best performing commodity on our watch list," CBA's Mr Mathews said.

* Australia's weather will turn drier this week, although a "few showers" are "possible" in New South Wales and Queensland this week, according to MDA Weather Services.

"Dryness remains extensive across central and southern Queensland and north central New South Wales, which has resulted in notable stress on sorghum," the US-based weather group said.

"However, growth will be finishing up over the next few weeks, and drier weather will now be favourable for the crop."

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