Canada Markets

Following three consecutive record wheat crops produced in Australia, Australia's ABARES has forecast wheat production at 26.2 million metric tons (mmt) for 2023-24. The forecast includes a 2% drop in area while lower yields are expected to lead to a 34% drop in production of all winter crops, which also includes a 34% drop in wheat production.

This forecast represents a 32.8% drop in output from the record 39 mmt-level achieved in 2022-23. This would be the largest year-over-year drop in six years, while the third largest in 20 years.

It is interesting to note that this volume would be the seventh largest wheat crop achieved, which ranges from the fifth largest crop for Western Australia to the 14th largest crop realized by Queensland, partially highlighting the increased effects of an expected El Nino pattern expected to take hold this growing season.

During the past five years (2018-19 to 2022-23), wheat production has averaged 5.4% higher than June forecast. At the same time, it is interesting to note that in years of falling wheat production during this period, the June forecast has overstated wheat production. Production in 2018-19 fell 19.6% or 4.3% below the June forecast, while in 2019-20, final production fell 31.7% or 6.72 mmt below the June forecast.

In the following years, or 2020-21 through to the most recent 2022-23 estimates when production is seen rising on the attached chart, the June report tended to understate production. In 2020-21, the final production estimate was 19.6% or 5.223 mmt higher than the June forecast, while ranging to the 2021-22 crop year where final production was 30.3% or 8.418 mmt higher than the June forecast.

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Cliff Jamieson can be reached at cliff.jamieson@dtn.com

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