Big grain production year on the cards

High grain prices guaranteed a big plant and good rainfall across virtually all the country's major cropping regions has set up yield and while forecasters are loathe to put out ultra-high numbers at this stage of the growing season many are saying it looks equally good as last year's bin-burster.

Headlining the forecasts is IKON Commodities' bold prediction that national canola production will exceed 5 million tonnes for the first time.

Ole Houe, IKON chief executive, said there had been a big jump in canola plantings as farmer sought to take advantage of the record prices currently on offer.

"The canola plant has only been constrained by seed availability and since then, in the two major grain producing states in NSW and WA, there have been very good conditions," Mr Houe said.

"It is a big number but we're confident that is what we are on track for."

James Maxwell, Australian Crop Forecasters, said he was predicting a 28.2m tonne wheat crop, with NSW and Western Australia leading the charge.

"We're expecting really good years in the two big production states," Mr Maxwell said.

"It is back to closer to normal in Victoria and South Australia, although these two states have improved in the last month, while Queensland is also looking good.

Mr Maxwell said there was scope for further upside if conditions remained good, but cautioned it was too early to factor in markedly above average yields in estimates.

"You take a look at Queensland, at this stage last year it looked really good and then came back hard with a dry spring."

He said farmers, spurred by high prices for virtually all commodities had planted a lot of hectares this year.

"There's been a big plant this year, so even with average yields there will still be a good amount of grain about."

He said barley tonnages were forecast to come in at around 9.8m tonnes and canola 4.5m tonnes.

Mr Houe said he had a wheat production forecast of 30.6m tonnes.

While smaller than last year's eventual wheat crop of 33.3m tonnes it is higher than the 28m tonnes IKON was forecasting at the same time last year.

Mr Houe said one possible downside was excessive moisture.

"You don't get it very often in Australia but there are patches in both NSW and WA in particular that do not want to get any wetter.

"Generally the moisture might cause damage in one part of the paddock but mean better yields in other so we're not overly worried but it is something to keep an eye on."

Last week's Grains Industry Association of Western Australia (GIWA) July crop report flagged the wet conditions as an impediment, especially in the Albany and Esperance port zones.

"The very wet areas in the south-west and south coast of WA are now becoming very very wet and tonnage estimates are down at least 10 to 15 per cent in the southern areas of the Albany port zone and the coastal strip in the Esperance port zone," the report said.

GIWA had total grain production in WA pegged at 19.6m tonnes, with wheat at 11.1m tonnes and canola 2.3m tonnes.

Rural Bank also put out national production figures this week.

Greg Kuchel, Rural Bank regional agribusiness manager for western Victoria, said wheat production was expected to be back 12pc year on year to 29.5m tonnes, but added this was still a historically high number, 22pc above the long term average.

He was also bullish on canola prospects, flagging a 4.4m tonne crop, some 30pc above long term averages.