Australia's winter grain crops are in very good shape, according to the quarterly update from the country's premier forecaster, the Australian Bureau of Agricultural and Resource Economics and Sciences.

The news comes after the summer crops were very strong, especially rice and cotton.

ABARES said yesterday it expects the main winter crop, wheat, will see a record 14.3 million hectares planted, 7% up on last year.

In total, the area sown for winter crops, such as wheat, barley and canola, is expected to rise 4% to 22.9 million hectares in 2011-12, the Bureau said in its quarterly grain report yesterday.

However, winter production is expected to be slightly lower than last year because it is expected that crop yields in most states will be unable to match last season's record levels.

Winter crop production is forecast to be around 40.8 million tonnes, compared with 42.1 million tonnes in 2010/11.

Total wheat production is forecast to be around 26.2 million tonnes, slightly below the previous season's record output.

Although global wheat prices have softened a little in recent weeks, the drought in parts of Europe and China has kept them fairly solid.

Russia will re-enter export markets from July 1, the reason for the recent easiness, but prices are still around 59% above where they were a year ago, which if sustained could see a significant boost in earnings for our rural sector and wheat farmers.

Deputy Director of the Bureau Paul Morris said that good soil moisture in the eastern states and favourable grain and oilseed prices have encouraged Australian producers to increase winter crop plantings this year.

Boosting the outlook has been rain across much of the previously very dry grain growing areas of Western Australia.

ABARES said," Rainfall received over summer and autumn across the cropping areas in these states has replenished soil moisture profiles and provides a good foundation for crop establishment and early growth. Planting has progressed reasonably well with final plantings expected to be completed by the end of June.

"After a dry start, recent rainfall over Western Australia's cropping regions has boosted winter crop prospects in that state. Around 70 to 80 per cent of plantings have been completed. Rainfall is needed over the next few weeks to complete planting programs.

"The winter rainfall outlook favours a wetter than normal season across cropping regions in northern New South Wales and southern Queensland. For southern New South Wales, Victoria and South Australia, there is an even chance of exceeding median rainfall over winter.

"In Western Australia, however, there is a below average chance of exceeding median winter rainfall over the cropping regions, but at the same time there is a 75 per cent chance of receiving between 50 and 200 millimetres of rain. The outcome of the Western Australian crop will depend critically on the timing of rainfall events."

The area planted to barley and canola in 2011-12 is expected to rise by 1% and 4% respectively.

Barley production is forecast to be slightly lower at around 8.1 million tonnes, but canola is expected to increase to 2.3 million.

Mr Morris said the harvesting of summer crops grown in 2010/11 is virtually complete, with production estimated at 4.8 million tonnes, 73% up on last year and thanks to the higher rains from the La Nina episode.

"The increased availability of water irrigation supplies last year allowed producers to plant substantially more cotton and rice, with cotton production reaching a new record and rice production at its highest point since 2005/06."

"Grain sorghum production is estimated to be around 2.1 million tonnes in 2010-11, 42 per cent higher than in 2009-10," the Bureau noted in yesterday's report.

"Rice production is estimated to have nearly quadrupled to 806 500 tonnes as a result of increased irrigation water availability.

"The cotton harvest is nearly complete and is estimated to have produced a record 898 000 tonnes in 2010-11.

"This compares with 387 000 tonnes in 2009-10 and the previous record of 818 000 tonnes achieved in 2000-01."

Copyright Australasian Investment Review.
AIR publishes a weekly magazine. Subscriptions are free at www.aireview.com.au

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