Winter crop planting up, but production to hang on La Niña

However, while overall planting is projected to be up, total production of grains and oilseeds for 2024-25 will be contingent on the expected onset of a late-season La Niña weather pattern in the second half of the year, according to report author Vitor Pistoia.

The bank expects total winter crop production to be near average for 2024-25.

“Assuming a tough start for Western Australia, South Australia and western Victoria, with a mid-to-late season recovery following better rainfall due to La Niña, we forecast overall production for winter crops will reach 46.3 million tonnes,” Mr Pistoia said.

Wheat surges

This year’s winter crop planting — representing a 3.6 per cent increase on 2023-24 though down 1.8 per cent on the five-year average — will favour wheat, with area planted to wheat forecast by Rabobank to surge 7.7 per cent (961,000 ha) higher than last year to 13.48 million hectares.

Canola, however, is set to lose ground — projected to shrink 12.7 per cent (450,000 ha) to 3.11 million hectares, due to dry conditions in Western Australia and South Australia as well as potential lower gross margins compared with previous seasons.

This would see wheat acreage at 6.9 per cent above the five-year average and canola still at 5.1 per cent above its five-year average despite the acreage decline.

Barley will likely take second place in the expansion this year, the report said, with an estimated 5.1 per cent (210,000 ha) rise on last year’s planting to 4.33 million hectares. This, however, would be 10.3 per cent below the five-year average.

“Oats will likely show a minimal uptick of 12,000 ha to a total of 0.7 million hectares, while planting intentions for pulses suggest acreage growth of 5.2 per cent year-on-year to 1.93 million hectares,” Mr Pistoia said.

Production forecast

For 2024-25 grain and oilseeds production, the bank’s ‘base case’ total winter crop forecast of 46.3 million tonnes comprises 27.4 million tonnes of wheat (projected to be up 5.7 per cent on the previous year).

Barley production is tipped to come in at 10.0 million tonnes (down 7.2 per cent on last year), while canola volumes are projected to be down 11.4 per cent to 5 million tonnes.

Oats and pulses were also expected to “lose tonnage” this year, according to the report — oat production forecast to drop 6.1 per cent on the previous season to 0.96 million tonnes and pulses down 10.8 per cent to 2.8 million tonnes.

Mr Pistoia said the “skewed trend away from other crops” reflected the significant expansion projected for wheat area planting this season.

NSW and Victoria

In Victoria, planted area is forecast to remain steady at 3.541 million hectares — albeit down marginally (by 0.1 per cent) on the previous season.

This will still represent the second-biggest winter area ever cropped in the state, and just 1.4 per cent under the 2020-21 record.

NSW’s cropping area is projected to increase 3.5 per cent on last year to 5.712 million hectares, mainly driven by better conditions in the state’s north.

Price outlook

Grain prices are likely to ‘hold firm’ in the year ahead, the Rabobank outlook says.

Rabobank forecasts Australian Premium White port prices for wheat to range between $360 and $390/tonne by harvest time — to be adjusted by global weather impacts on wheat production.

“This would be eight to 12 per cent less than prices on December 1, 2023,” Mr Pistoia said.

Barley prices are likely to be sustained by improved cattle prices and red meat export opportunities. The report says prices during harvest for feed barley are on track to be in the $350 to $370/tonne range for east coast ports.

Malt barley premiums remain the weakest of all the major barley exports, due to soft demand from maltsters in Australia’s key South-East Asian export markets.

“Therefore, barley industry drivers are currently heavily entwined in the feed market and the livestock sector’s future,” Mr Pistoia said.

For canola, the reduction in Australian supply should boost prices.

“This means Australian non-GM canola port prices could range between $680 and $720 per tonne at the next harvest,” Mr Pistoia said.

The bank expects Australia will export 19.8 million tonnes of wheat, 3.9 million tonnes of barley and 3.6 million tonnes of canola from the 2024-25 winter crop harvest.