Grain Areas in Australia Get Rainfall, Easing Stress

By Madelene Pearson

Sept. 7 (Bloomberg) -- Australia, the world’s fourth- largest wheat exporter, received rainfall over the weekend in New South Wales and Queensland states, easing concern that production may suffer after adverse weather.

“The rain will significantly help ease moisture stress that had become increasingly evident across parts of the Queensland and New South Wales wheat belt,” Luke Mathews, agri- commodity strategist at Commonwealth Bank of Australia, said in an e-mailed report today.

Growers in Australia rely on rain in September to help boost yields in winter crops including wheat, barley and canola before the harvest from November. Commonwealth Bank said on Aug. 24 that growing regions in the two states needed urgent rain after hot, dry weather cut yield prospects.

A front and trough are starting to spread some rain over New South Wales, Queensland and Victoria, the bank said today, citing forecaster weatherzone.com.au. A high-pressure system is directing some showers over coastal South Australia and keeping Western Australia dry for now, it said.

Milling wheat futures for January delivery fell 3.2 percent to A$214 ($181) a metric ton on the Australian stock exchange at 12:38 p.m. in Sydney. The contract is domestic-focused for grain delivered in New South Wales, the nation’s No. 2 wheat producer.

Export Contract

Export wheat futures contracts will begin trading Sept. 14 in a move designed to set a benchmark for shipments, ASX Ltd., operator of the nation’s biggest exchange, said today.

The unit for Western Australia Wheat futures is 20 tons, priced at Kwinana, West Australia, according to an e-mailed statement from ASX. Options will be available from Sept. 15.

Australia ended its monopoly selling system for wheat shipments last year, giving 23 traders permission to export. Western Australia is the nation’s biggest wheat-growing region, with most of its crop sold overseas.

West Australian production may be greater than forecast a month ago after most areas had good rainfall in August, according to the state government.

The state may produce 11 million to 13 million tons of all grains this harvest, the local Department of Agriculture and Food said in its latest seasonal report. Wheat output may be 7.5 million to 9 million tons, it said. It had previously tipped a total grains crop of 10 million to 12 million tons.

To contact the reporter on this story: Madelene Pearson in Melbourne on mpearson1@bloomberg.net