Canberra – January 26, 2021
The forecasts Australia’s MY 2020/21 wheat production at 31 million metric tons (MMT), a 1 MMT increase over the official US Deparment of Agriculture forecast.
This would be the second largest crop in history for Australia.
Increased forecast is primarily a result of the Western Australian crop being larger than expected despite a challenging growing season.
New South Wales also contributed to the improved forecast with favorable conditions allowing the crop to reach its potential.
The forecast for Australian wheat consumption in MY 2020/21 is 7.5 MMT, 500,000 MT lower than official US Department of Agriculture that forecast of 8 MMT due to lower feed use.
This feed forecast is due to two major factors:
Rains in eastern Australia in 2020 have boosted pasture growth and reduced the need for on-farm feeding of grain to livestock;
The high Chinese tariffs on Australian barley has resulted in rising use of barley in domestic feed rations compared to wheat.
With a low-price differential, livestock feeders prefer to use wheat over barley.
With a large harvest of both wheat and barley in MY 2020/21, the market differential between the two grains is expected to remain relatively stable.
The forecast for wheat exports is 21 MMT, 1 MT above the official US Ag’s forecast as a result of the higher production forecast.
It would be the third time exports have surpassed 20 MMT, with the last time being MY 2016/17 when 22.6 MMT was exported.
Although Australian wheat is beginning to price into markets as far away as Africa and the Middle East, even with the huge export volumes that are expected in MY 2020/21 the strong majority is expected to remain in nearby Asian markets.
The forecasts wheat imports in MY 2020/21 are estimated at 200,000 MT.
Australia’s ending stocks of wheat in MY 2020/21 are expected to grow from the low levels of the previous year as a result of the higher production.
Other Australian grains 2020-21
BARLEY
The forecasts Australia’s MY 2020/21 barley production at 11.5 MMT.
The forecast for MY 2020/21 barley consumption is unchanged at 5.9 MMT.
Australia’s barley exports for MY 2020/21 are forecast at 4.7 MMT, down 300,000 MT from the official forecast.
Australia’s ending stocks of barley are expected to continue to rise in MY 2020/21 as a result of a large barley production season and the Chinese tariffs limiting even greater increases in exports.
SORGHUM
Sorghum production forecast for MY 2020/21 has been revised downwards to 1.2 MMT, from the official forecast of 1.7 MMT.
The forecasts sorghum consumption in MY 2020/21 is at 630,000 MT, which is substantially lower than the official forecast of 1 MMT.
Sorghum export forecast for MY 2020/21 is 500,000 MT, in line with the official forecast.
