PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 15:59 UK, 4th Oct 2012, by Agrimoney.com
Australian wheat crop poised for another downgrade

Commonwealth Bank of Australia is poised to cut its forecast for the Australian wheat harvest, although it is unclear that the downgrade will lower further bar on estimates for the crop.

The bank, which in August lowered its forecast for the crop by 1.0m tonnes to 23.95m tonnes, will on Friday unveil a fresh, and lower, estimate, CBA analyst Luke Mathews said.

The downgrade will reflect the impact of dry conditions "which have prevailed across much of the grain, belt, South Australia, the Mallee in Victoria," he told Agrimoney.com.

"Parts of Western Australia and New South Wales are too dry."

Indeed, the cut would be the latest in a series by commentators, including a cut to 20m tonnes in the Australia & New Zealand Bank forecast which Agrimoney.com  revealed last month.

'At least 2m tonnes too high'

On Wednesday, farm officials in New South Wales cautioned over damage to grain crops from dry weather, and warned of further losses if rains are not forthcoming, while grain handler CBH Group trimmed expectations for the Western Australian harvest.

And the US Department of Agriculture's bureau in Canberra cut by 2.0m tones its forecast for the Australian harvest, if to a figure of 24.0m tonnes which remains well above consensus estimates.

"It is likely the 24m-tonne estimate is still at least 2m tonnes too high," Mr Mathews said, while declining to reveal the range of figures CBA was considering downgrading its number to.

The market appears to be factoring in a crop of about 20m-22.5m tonnes, he said.

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