Australia wheat hopes grow, but virus hits canola

Some of the first official data on Australian winter crops since they established, for South Australia, has underlined expectations for a stronger-than-forecast wheat harvest, but highlighted canola losses to disease.

South Australia's wheat crop will come in at 4.64m tonnes, according to farm officials in the state, the country's third-ranked producer after Western Australia and New Zealand.

While down 336,000 tonnes year on year, a result at that level would be better than the 4.36m tonnes forecast by the official Abares commodities bureau in June.

And it reflects benign conditions which have left South Australia with "high levels of stored soil moisture", supporting "above average" yield expectations for most of the state.

"Early sowings, combined with mild conditions during May and early June, enabled crops to grow rapidly in most areas of the state, and many crops are two to three weeks ahead of normal crop development," officials in the state's government said.

'Started very well'

The estimate tallies with talk from analysts of a strong South Australian crop, with Australia & New Zealand Bank saying last week that "the wheat crop in the south of Australia has the potential for above-average yields.

Crops in the area "have benefited from not only an exceptional start to the season, but rainfall in July still near long-term averages".

National Australia Bank said that its bankers "report that the season has started very well" in the state, as well as in Western Australia.

NAB forecast a fall of only 1.0m tonnes in Australian wheat production this year, from the 27.0m tonnes recorded for 2013-14, while Abares foresees a 2.43m-tonne drop.

'Hard to find a real problem'

Separately, grain handler CBH Group said last week that the Western Australia crop is likely to hit 9.4m tonnes, 1.0m tonnes above the Abares forecast.

Meanwhile, broker Pentag Nidera said that, excluding the continued drought in northern New South Wales and Queensland, "it is hard to find a real problem with our own winter crop despite the El Nino chatter."

El Ninos typically bring dry weather to eastern Australia, much of which has indeed seen low rainfall, although the chances of the weather pattern setting in short term have decreased, according to official Australian forecasters.

"Even some of our moisture deficit areas still have time to save some production respectability, with crops pretty much 'sitting still' under mid-winter conditions," Pentag said.

Canola disease

However, the report from the South Australia government did highlight the threat to the state's canola crop from beet western yellows virus, which is carried by aphids.

"Green peach aphids were often not controlled due to resistance to the commonly used insecticides," and transmission rates of the virus are high, at 97%.

The officials estimated the South Australia canola crop at 334,500 tonnes, below the Abares forecast of 3.47m tonnes, and the state's weakest result in four years.

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