Winter crop area tipped to shrink as growers battle dry conditions

Australia is set to plant a reduced winter crop this season, with Rabobank estimating total winter cropping area will fall eight per cent on last year to 23.1 million hectares — 4.3 per cent below the five-year average.

The sharpest decline is in wheat, with plantings forecast to drop 20.4 per cent to 9.8 million hectares — 24 per cent below the five-year average — as growers shift to barley, canola and pulses, which are offering stronger relative margins.

The geographic picture is uneven. Western Australia is on track for a record 9.47 million hectares (up 5.7 per cent), while Queensland is forecast to fall 34.8 per cent to 1.06 million hectares and New South Wales down 29.2 per cent to 4.82 million hectares. Planted area in South Australia and Victoria is expected to remain relatively stable.

RaboResearch senior grains and oilseeds analyst, Vitor Pistoia, said the split reflects dry summer and early autumn conditions across Queensland and northern NSW, which have left limited topsoil moisture and delayed sowing. Western Australia, South Australia, Victoria and southern NSW entered the season with average to above-average soil moisture, enabling earlier seeding.

"This marks a reversal from the past two seasons, when eastern regions of Australia held stronger soil moisture at this time," Pistoia said.

Recent rainfall across Queensland and NSW, while welcome, is unlikely to be sufficient to support a full cropping program, with some regions needing up to 100 millimetres to replenish soil moisture.

Looking ahead, Rabobank sees a likelihood of lower growing-season rainfall, with elevated risk of El Niño conditions through the winter months. Starting-season soil moisture is expected to be a key determinant of yields, contributing to greater variability across the cropping belt.

Elevated farm input costs — particularly fertiliser and diesel — are also shaping cropping decisions. Higher global fuel prices, linked to the Middle East conflict, are increasing production costs and encouraging shifts to lower-input crops.

"These higher costs are encouraging shifts towards lower-input crops and contributing to a reduction in total cropping area," Pistoia said.

He noted that elevated diesel prices may also reduce the volume of grain moving to export markets globally, with some regions potentially opting to supply local demand rather than export — a factor that could provide some support to international grain prices later in the season.

Barley plantings are forecast at 5.1 million hectares, up 4.1 per cent on last year and 14.6 per cent above the five-year average, supported by resilient feed demand in Asia and the Middle East.

Canola area is projected to rise 8.5 per cent to 3.7 million hectares, driven by improved returns relative to wheat and strong early-season moisture in WA and SA. Global oilseed markets remain supported by biofuel policies and elevated energy prices.

Pulse plantings are estimated at 3.5 million hectares — up 0.7 per cent on last year and 42.3 per cent above the five-year average — though prices are expected to remain range-bound amid headwinds from weaker importing-country currencies and higher freight costs.

On production, Rabobank's base case for the 2026/27 season is approximately 21.3 million tonnes of wheat — down 41 per cent on last season's 35.8 million tonnes. Barley is forecast at 14.1 million tonnes (down 15 per cent despite increased area), and canola at 6.4 million tonnes (down 13 per cent, in line with the five-year average).

On exports, Rabobank expects rising fuel costs to increasingly favour Australian grain into South East Asia, where shorter shipping distances improve competitiveness relative to the Americas.