28/11/2014 - 14:22

12.8mt wheat harvest tipped

28/11/2014 - 14:22

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The falling Australian dollar has been a positive development for growers of the state’s two largest agricultural exports as the harvest cranks up across the grain belt.

12.8mt wheat harvest tipped
Two thirds of the harvest has been completed.

The falling Australian dollar has been a positive development for growers of the state’s two largest agricultural exports as the harvest cranks up across the grain belt.

The harvest began at the end of October, just as canola prices rebounded from their lowest point this year, while wheat prices have improved nearly 10 per cent recently, to around $300 per tonne.

CBH Group general manager of marketing and trading Jason Craig said volumes would be high this year, but not to the record level of the 2013-14 harvest.

“Our expectations are the harvest will be lower this year than last year … last year was a record 15.8 million (tonnes),” he said.

“It’s still in probably the top five years of production.”

CBH said today that yields were 15 per cent lower than initially expected and the total harvest would be 12.8 million tonnes, with about two thirds collected so far.

The majority of the reduction was in the Albany and Geraldton zones, the grain handler said, after natural events including thunderstorms in Geraldton and high moisture in Albany had impacted the harvest.

Wheat is the state’s top agricultural export, with around three quarters of Western Australia’s production destined for foreign ports, according to the Department of Agriculture and Food.

Last year, WA exported just more than $2.8 billion of wheat, with Indonesia the top destination, taking about a quarter of the crop.

“Wheat for example really peaked somewhere in around late May, early June, in terms of price levels and then came quickly down as the international market came down,” Mr Craig said, adding that prices had since improved.

“Prices are being driven up domestically in Australia due to the weaker Australian dollar over the last few days.

“Particularly in Western Australia and South Australia, slightly lower crop than expectations is also encouraging people to buy.”

Other major grain producers, including the US, Canada and the Black Sea area have had reasonable seasons, Mr Craig said, but being in the Northern Hemisphere their production season is different.

Around a fifth to a quarter of a typical grower’s production is sold in forward contracts, while a large portion is sold in the spot market.

Grain is additionally sold in the deferred market, in January to March of the next year.

Canola, the state’s second largest agricultural export last year at just more than $1 billion, has performed similarly, sitting around $490 per tonne.

“Canola prices have been coming off after large crops in Europe this year,” Mr Craig said.

“That has kicked (up) a little bit, mainly on a lower Aussie dollar.

“There are some concerns about the potential plantings in Europe, which will assist canola prices.”

He said that buyers trying to cover early shipping slots had additionally helped prices to spike.

The average wheat price for the 12 years to 2011 was $250 per tonne, the department said.

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