11 Jul 2012
By Kondinin Group
RABOBANK has reduced its forecast for Australian grain production this season by 1.5 million tonnes, with the likely return to El Nino conditions playing a role in the drop.
The bank’s latest agribusiness review says the likely return of El Nino conditions in the second quarter of the 2012/13 financial year could increase the chances of a dry finish to crops.
“We reduce our 2012/13 production forecast for Australia by 1.5 million tonnes to 24.5 million tonnes – in our view adequate to export around 21 million tonnes in 2012/13,” the report said.
“Running an export programme at 86 per cent of production, such as we forecast, is necessary to draw down beginning stock from near record levels of 8.8 million tonnes for 2011/12 to our forecast 2012/13 forecast of 4.5 million tonnes.
“This is realistic, with ending stocks in this scenario remaining above levels in the 2006/07 through 2008/09 marketing years.” Rabobank said despite the revised forecast, major crop failure was not expected given favourable sub soil moisture levels in most regions.
“Upper layer soil moisture profiles improved across eastern areas of Queensland and deteriorated slightly in northern New South Wales and southern Western Australia,” the report said.
“Subsoil moisture levels also deteriorated across south-eastern grain growing districts.
“Rainfall was mixed across the country, with average to above average rainfall received across Queensland and coastal areas of NSW and Victoria.”
According to the Bureau of Meteorology, drier-than-normal conditions are expected across southern areas of WA, South Australia, Victoria and north-eastern Tasmania during mid-winter and early spring.
However, northern Queensland is set to receive higher rainfall than usual, in line with predictions El Nino conditions will return this year.
“According to the bureau, other climate indicators including Pacific Ocean temperatures and trade winds are also trending towards El Nino levels,” Rabobank said.
“Climate models suggest that the tropical pacific may approach or exceed El Nino thresholds between now and spring.”