(Bloomberg) -- A lack of spring rain across Western Australia is expected to crimp wheat production in the nation’s top growing state, according to an industry report, which will likely compound tight global supply.
Output is forecast at 9.3 million tons this season, the Grain Industry Association of Western Australia said in a monthly report on Friday, reducing its estimate by 7% from a month ago. Without further rain in the next two weeks, the slide in overall grain tonnage will continue, according to the group.
A reduction in wheat exports from Australia could add to concerns about global supply, which are the tightest in nine years. Grain futures in Chicago rose on Friday and are almost 9% higher since late August.
Earlier this month, the Australia Bureau of Agricultural and Resource Economics and Sciences estimated Australia was set to produce 31.8 million tons of wheat, 20% above the 10-year average and 23% higher than the year prior. The next report is due to come out in December.
There are still areas in the southern Western Australia that could recover grain yield potential if they get rain over the next two weeks, GIWA said. However, without it, the overall grain tonnage for the state could be closer to 15 million tons, rather than 17 million tons currently forecast.
Farmers in Western Australia typically start harvesting around November.
Other GIWA crop estimates from the September report:
- Barley: 4.27 million tons, unchanged from August
- Canola: 2.22 million tons, compared with 2.12 million in August
- Oats: 555,000 tons, up from 535,000 tons
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