Australia cut its forecast for wheat exports this season by 1.36m tonnes, thanks to the drought-hit harvest, and downgraded expectations for coarse grain and canola shipments too, to seven-year lows.
Abares, the Australian commodities bureau, lowered to 16.80m tonnes its forecast for Australia’s wheat exports in 2017-18, on a July-to-June basis – representing a 24% drop year on year.
The downgrade reflected the cut last week by the bureau, to 20.27m tonnes, in its forecast for this season’s wheat harvest, after setbacks from dryness, late frosts, and late rains.
“Exportable supplies are expected to decline as a result of the smaller harvest, despite this being partially offset by large opening stocks,” Abares said.
The revision took the estimate below the US Department of Agriculture’s forecast that Australia will export 17.5m tonnes of wheat this season, while the International Grains Council sees them reaching 19.0m tonnes.
‘Lower EU demand’
Abares also lowered its forecast for Australian canola shipments this season by 152,000 tones, to 1.89m tones, downgrading the figure to the lowest since 2010-11.
The revision came despite an upgrade last week, of 100,000 tonnes to 2.85m tonnes, in Abares’ forecast for the domestic canola crop this season, with the bureau flagging now “lower demand” from the European Union, the top producer of rapeseed.
“EU import demand is forecast to fall, reflecting an expected recovery in production,” the bureau said noting also “a forecast increase in canola production in Ukraine, a key competitor for Australia in that [EU] market”.
However, for coarse grains, Abares raised its forecast for Australia’s 2017-18 exports, by 132,000 tonnes to 6.26m tonnes, helped by the improved prospects for output of sorghum which, as a summer crop, has benefited from the rains which have hampered wheat harvesting in eastern areas.
Still, coarse grain exports were seen falling well below the 2.80m tonnes shipped last season.
“Significantly lower barley and oat production combined with increased domestic feed demand is expected to reduce the volume available for export,” Abares said.
“Grain sorghum exports are forecast to increase due to increased production following dry seasonal conditions in 2016–17.”