Australia Wheat Crop Faces Hot, Dry Weather for Next Three Months

July 11th, 2019


Category: Grains, Weather

(Reuters) – Hot, dry weather will persist across Australia’s east coast until at least October, the country’s weather bureau said on Thursday, signalling no relief for drought-hit farmers in one of the world’s largest agricultural producers.

There is just a 30% chance that Australia’s east coast will receive average rainfalls between Aug. 1 and Oct. 30, the Bureau of Meteorology said in its latest climate outlook.

The forecast would extend drought conditions that have devastated agricultural production across Australia’s east coast into a third year.

In a further blow, the bureau said there is at least an 80% chance that the entire country will record warmer than average temperatures over the next three months.

Australia’s chief commodity forecaster in June lowered its forecast for wheat production over the 2019/20 season by more than 11%, but warned rains were desperately needed to avoid further downgrades.

Lower production may help support benchmark global wheat prices but it threatens to be a drag on the Australian economy.

Wheat is the country’s most lucrative rural export from an agricultural sector worth about A$50 billion ($35 billion).

With Australia on course to have only a small exportable crop, traditional buyers of its wheat such as Indonesian and Japanese millers will be forced to look to alternative markets such as Russia at a time when prices are rallying.

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