Australia’s farmers are expected to plant 23.55mha to winter crops this year – up more than 3% on 2023 despite a mixed start to the season across the country, according to Rabobank’s 2024-25 Australian Winter Crop Outlook.
The Report noted the increase in planting was driven by a positive outlook for NSW and Queensland, alongside overall margins improving year-on-year.
However, while overall planting is projected to be up, total Australian 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, RaboResearch analyst Vitor Pistoia.
Mr Pistoia highlighted the uneven start to the season, describing it as a "tale of two coasts" with strong, early sowing in the east and a dry start in the west.
“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 46.3m tonnes,” Mr Pistoia said.
Planting
Wheat will be favoured in this year's winter crop planting, which represents a 3.6% increase from 2023-24. However, is down 1.8% on the five-year average.
Rabobank forecasts a 7.7% rise (961,000ha) in wheat planting, reaching 13.48mha.
Conversely, canola plantings were set to shrink by 12.7% (450,000ha) to 3.11mha due to dry conditions and lower gross margins in Western and South Australia.
Despite the decline, canola acreage remains 5.1% above its five-year average, while wheat is 6.9% above its five-year average.
Barley plantings were estimated to rise by 5.1% (210,000ha) to 4.33mha, though this is 10.3% below the five-year average. Oats will likely see a minimal increase of 12,000ha, totaling 0.7mha, and pulses are expected to grow by 5.2% year-on-year to 1.93m hectares.
Mr Pistoia noted, “Oats will likely show a minimal uptick,” and "planting intentions for pulses suggest acreage growth.”
Production
For 2024-25, Rabobank's “base case” forecast for total winter crop production is 46.3m tonnes, including 27.4m tonnes of wheat, which is projected to increase by 5.7%.
Barley production is forecast at 10m tonnes (down 7.2%), and canola at 5m tonnes (down 11.4%).
Oats and pulses are expected to "lose tonnage", with oat production dropping 6.1% to 0.96m tonnes and pulses down 10.8% to 2.8m tonnes.
Mr Pistoia noted the "skewed trend away from other crops" due to the significant expansion in wheat planting.
State projections
Despite a dry start in Western Australia and other regions, crop plantings are expected to increase or remain steady across all states:
Grain prices are likely to hold firm in the year ahead, the Rabobank outlook says.
“The 2024-25 season is likely to mark the fifth consecutive season of dwindling global ending stocks for wheat,” Mr Pistoia said.
“Dry weather and frost in the Black Sea region has tilted the supply and demand balance for wheat towards a positive price cycle.”
Rabobank forecasts APW (Australian Premium White) port prices for wheat to range between $360 and $390 per tonne by harvest time, to be adjusted by global weather impacts on wheat production.
For barley, prices are likely to be sustained by improved cattle prices and red meat export opportunities.
The report highted that prices during harvest for feed barley are on track to be in the $350 to $370 per tonne range for east coast ports and $320 to $340 per tonne for WA and SA.
“The price difference is due to WA and SA’s larger barley export profile, which means barley from these states will be competing with cheaper corn on global markets,” Mr Pistoia said.
Australia’s malt barley premiums remain the weakest of all the major barley exports, the report said, 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, with global ending stocks poised to decline year on year.
“This means Australian non-GM canola port prices could range between $680 and $720 per tonne at the next harvest, with WA figuring in the top range due to its comparatively shorter transit time to South-East Asia and Europe,” he said.
Exports
Based on the bank’s base case production forecast - and not including carryover stocks from previous seasons - Australia is expected to export 19.8m tonnes of wheat, 3.9m tonnes of barley and 3.6m tonnes of canola from the 2024-25 winter crop harvest.
Current higher freight rates for exports, largely due to the ongoing Houthi attacks in the Red Sea "shattering" global trade routes, have the potential to ease by the end of the year.
"All else being equal, by the end of the year, freight rates have room to become a little softer as risk premiums fade,” Mr Pistoia said.
He further cautioned "trade wars, tariffs, and sanctions are key topics for 2024, so volatility is almost certain".