Bumper harvest on the cards

Agri-finance expert Rabobank's latest Australian Crop Update says the autumn break has seen the 2016/17 winter crop planted into a good soil-moisture profile that could lead to a 26.7 million tonne wheat crop harvest this year – up 10 per cent from last year.

However, not all parts of Australia received a good amount of rain to kick start the season, with parts of northern New South Wales and Queensland remaining fairly dry.

"While there has been some rain in this part of the country in recent weeks, it fell too late for many producers to fulfil their winter planting intentions, with some opting to leave their land fallow for summer crops," says Rabobank grains and oilseeds analyst, Ben Larkin.

"In contrast, conditions in Western Australia couldn't be better, with the majority of the state's cropping regions recording between 100 and 300mm of rain between January and May."

Most of southern New South Wales, Victoria and South Australia also enjoyed enough rain to facilitate a full planting program.

"That said, we are not expecting to see an increase in the area planted to wheat this season with the increase in national production likely to be driven by yields, which are forecast to average around 2.09 tonnes to the hectare," Larkin says.

He adds 'price signals' were a key driver of crop rotations this season, with barley acreage expected to be down by three per cent and canola expected to be up by a similar percentage.

"Western Australia has reported the biggest swing to canola, with planted area in the west expected to be up five per cent," he says.

"However, despite favourable conditions in Victoria, many farmers have erred on the side of caution after last year's dry spring slashed canola yields."

Larkin says despite the decline in the area planted to barley, the national crop is expected to be up by four per cent on last year at 8.79 million tonnes, while canola is expected to surge to 3.28 million tonnes – an 11 per cent increase.

"We are also seeing a swing towards chickpeas and lentils this season, with high prices spurring an increase in planting," he says.

Larkin warns while current conditions and the expectation of a wetter-than-average year underpinned forecasts of an above-average crop, much would depend on follow-up rainfall during spring.

"We are still four to five months out from harvest, so while the season is shaping up well, there is still a long way to go," he says.

Larkin adds prospects of a good harvest were overhanging the global grains market, which remained "awash with wheat".

"With there being little upside to wheat and barley prices this season, unless there is a significant weather-related event, Australian farmers will be relying on good yields to underpin profit margins this year," he says.

"As we move through winter and spring, farmers will be looking to the skies and hoping weather forecasts eventuate, as the potential is certainly sitting in the ground."