Australia’s national wheat production dips while global crops prove ‘significantly’ bigger than expected

Australian wheat production is forecast to fall to its lowest level in five years, while global crops elsewhere prove “significantly” bigger than expected — sending prices downward.

Bigger production forecasts and “relatively unimpeded exports” from the Black Sea have caused global wheat prices to fall in recent months, with Australian quotes falling $4 per tonne since May.

Prices as of June 6 were sitting at — on average — $301 per tonne from Australia, compared to Argentina ($378), Canada ($322), the EU ($250), Russia ($227) and the US ($353).

That’s according to the United States Department of Agriculture’s latest two grain and canola reports, which also revealed Australia was on track to produce its smallest wheat crop in five years.

The nation’s wheat production is set to fall from a bumper 39 million tonnes in 2022-23, to 29Mt in 2023-24, the smallest production volume since 2019-20 when the crop was just 14.48Mt.

About 24.5Mt of that was expected to be exported as wheat, flour or associated products.

It was a similar story of decline in Australian barley production, with a reduction from the highs of more than 14Mt in 2021-22 and 2021-22 to 10Mt in 2023-24.

The figure is on par with the 10Mt produced by the nation’s farmers in 2019-20.

Of that 10Mt barley production forecast, about 5.5Mt was expected to be exported.

The report showed global wheat production was “significantly” on the rise for 2023-24, with bigger crops expected in India, Russia, the EU and Ukraine — sending export estimates rising.

China continues to ramp up its demand for wheat after some of its growing regions were impacted by heavy rains, with Australian wheat continuing to be in hot demand from the Asian superpower.

Separately, Australia is expected to export less canola in 2023-24, down from 4.5Mt to 4Mt, attributed to a reduction in “exportable supplies”.