As per the latest release from United States Department of Agriculture (USDA), the Australian wheat production is forecast at 18 MMT for 2018/19, slightly below the revised official forecast of 18.5 MMT as a result of very dry and hot conditions across major wheat growing areas. The harvested area is expected to be stable at 11 million hectares. Very dry and hot conditions in eastern Australia reduced both expected production and likely yields. Yield is forecast at 1.63 tons per hectare, 19 percent below the 5-year average. The poor condition of existing crops and the continuing drought conditions mean that an increasing share of the wheat crop, especially in NSW, will be cut for feed. Post has increased the proportion of feed wheat to 6 MMT due the seasonal outlook and the current high domestic prices for livestock feed.
Wheat domestic consumption is estimated at 9.5 MMT for 2018/19 due to a significant shortage of grains for livestock production caused by poor pasture and dry conditions across eastern Australia. This situation has led to a sharp rise in domestic feed grain and hay prices in eastern Australia.
Australian wheat exports are forecast to decline to 12 MMT for 2018/2019, reflecting lower production caused by the drought and high prices for domestic feed grains and hay.