CBH Group, Australia's biggest grain exporter, revealed it was building "emergency" storage capacity to deal with a 2016 harvest which could prove the strongest ever, helped by a timely moisture for spring sowings.
The co-operative - which handles the vast majority of the grains harvest in Western Australia, Australia's top wheat growing state – said it was to construct 400,000 tonnes in short-term storage capacity, on top of site enhancements being enacted during a scheduled Aus$750m maintenance and upgrade programmes.
The decision comes amid expectations of a "bumper year" for the state's gain growers, "with the current crop estimates sitting at 14m-16m tonnes", potentially eclipsing the current all-time high of 15.9m tonnes set three years ago.
Abares, the official Australian commodities bureau, has forecast the state achieving a harvest of some 15.5m tonnes this year, a rise of more than 800,000 tonnes year on year, including 513,000 tonnes of lupins, besides major crops such as barley, canola and wheat.
The upbeat prospects reflect unusually strong rainfall in Western Australia, which has a history of patchy moisture, getting crops off to strong start.
Indeed, in some areas, rainfall has proved somewhat excessive.
David Capper, the CBH general manager of operations, while acknowledging talk of "high yields", said that this depended on further benign conditions.
"In some areas, waterlogging means that a few weeks of drier weather would be welcome," he said.
He also flagged a switch by farmers to coarse grains, such as barley and wheat, away from wheat, futures in which were, in Sydney, priced at Aus$249.00 a tonne on Tuesday for September delivery, the lowest for a spot contract in four years.
Early estimates achieved from a grower survey "indicate a strong swing to coarse grains away from wheat, which will have a significant impact on storage", Mr Capper said.
Abares' estimates factor in a drop of 25,000 hectares to 5.13m hectares in Western Australian wheat sowings this year.
On coarse grains, the bureau foresees an increase of 31,000 hectares to 341,000 hectares in oats seedings, but a 25,000-hectare drop to 1.33m hectares in barley sowings.