Australia's 2018/19 wheat crop is expected to rise 11.8 per cent from the previous season, the country's chief commodity forecaster said on Tuesday, as La Nina weather conditions boost yields across the world's fourth-largest exporter, reports Reuters.
Australia will begin sowing wheat crops late next month and despite a small decline in plantings, farmers will harvest 23.7 million tonnes, the Australian Bureau of Agriculture, Resource Economics and Rural Sciences (ABARES) forecast, up from 21.2 million tonnes produced last year.
ABARES said the rise in production follows the La Nina weather phenomenon will increase the rainfall for Australia's east coast. That will provide much needed water for a region that last season received only half the amount it would normally, data from Australia's Bureau of Meteorology showed.
Rising Australian wheat production could temper the recent gains in benchmark prices. Wheat futures in Chicago have rebounded from one-year lows reached in December on concerns weather could impact supply but the higher output could renew the market's focus on bumper global stockpiles.
Despite possibly pressuring prices, the increased Australian output will aid the country's largest bulk grain handler GrainCorp, which last month said it expects underlying profit to halve this financial year after poor production across the country's east coast, where the company dominates trading.
The La Nina weather event will also aid Australia's cattle industry, which has been struggling to rebuild after drought conditions in 2015 and 2016 as a result of an El Nino weather pattern left farmers unable to feed and water their livestock.
ABARES said Australian beef production will rise to 2.23 million tonnes, from 2.2 million tonnes produced last year.
Higher production will allow local farmers to tap the lucrative export markets of China and Japan, ABARES said, as exports grow 2.0 per cent next season.
Australia's sugar industry, which is also concentrated on the country's east coast, will also benefit from the La Nina-associated rains.
Sugar production will increase to 4.8 million tonnes next season, from 4.7 million tonnes produced last year, a crop that was also damaged by a powerful cyclone in March 2017.
Meanwhile, Australian canola production during the 2018/19 season will total 4 million tonnes, up from 3.7 million tonnes produced last year.