Commonwealth Bank of Australia raised doubts over Australia
hanging on to second place among world wheat exporters by forecasting a slump
of nearly 30% in shipments, to a level well below official estimates.
The bank forecast that the country's wheat shipments will
tumble to 17.8m tonnes in the 2012-13 marketing year - which has, with the
harvest, just started in Australia.
The estimate is far below the 21.5m tonnes forecast by
Abares, Australia's official commodities bureau, and by the International Grains
Council, and a 21.0m-tonne estimate from the US Department of Agriculture,
whose data set world benchmarks.
And it would, on current USDA figures, demote Australia
behind Canada as well the US in the world wheat exporters' league.
The estimates also imply tougher competition for wheat among
importers at a time when available supplies in big exporting nations have
already been hit by poor weather in parts of Europe and, in particular, the
former Soviet Union.
Indeed, CBA, in a report trailed by Agrimoney.com on Thursday, said that its forecast reflected in part the clamour
for Australian wheat in the newly-finished 2011-12 season, when, on its
estimates, shipments hit a record 24.9m tonnes.
"The record export programme reflects record local supplies,
weak local basis, strong international wheat demand, and shrinking supplies in
other key exporting regions," CBA agri commodities analyst Luke Mathews said.
The pace of shipments left inventories with bulk handlers at
6.5m tonnes at the end of last season, a drop of 1.8m tonnes year on year.
And hopes for replenishing elevators have been hurt by the dryness
which has left Australia looking at a sharp drop in production from last season's
CBA cut its estimate for the newly-started harvest to 21.4m,
a downgrade of 2.6m tonnes from its August outlook, if within the range the
market is already believed to be trading.
The rise and fall of Australia's wheat exports
2012-13: 17.8m tonnes
2011-12: 24.9m tonnes
2010-11: 18.58m tonnes
2009-10: 14.79m tonnes
2008-09: 14.71m tonnes
Sources: CBA, Abares
"Production prospects have been downgraded around the
country," Mr Mathews said, signalling that a further cut to estimates was
possible if rain was not forthcoming.
"Further rainfall in
October is needed to maintain our revised production potentials. Topsoil
moisture reserves are minimal and temperatures are warming."
The implications of the lower export hopes looked set to be
felt largely in South Australia, where supplies are set to fall 2m tonnes to
4.2m tonnes in 2012-13.
This implies that the state - in which Viterra, the crop
merchant being bought by Glencore is the dominant grain handler – "will be a far
less aggressive exporter of wheat in 2012-13 compared to the previous two
seasons", Mr Mathews said.
In the east coast, wheat supplies will drop to 13.3m tonnes
from 18.7m tonnes in 2011-12, with Western Australian supplies proving the most
resilient, and able to "support a strong export programme over the coming year".
The drop in east coast supplies bodes well for local prices,
which against Chicago values "are likely to appreciate by more than we expected
earlier in the season", Mr Mathews said.
"Our expectation is for local basis versus Chicago wheat) to
appreciate to Aus$5-15 per tonne over the coming 12 months."