Official Agency of agricultural forecasts of Australia on Tuesday reported that the weak global wheat prices forced farmers to sow other crops, and reduced the forecast of the national wheat production next year to 25.4 million tonnes, which is 5% lower than some private forecasts.

Despite heavy rains, creating favorable growing conditions, the area sown with wheat, as predicted, reduced, reflecting higher incomes from production of other crops, said the leadership of the Bureau of Agriculture, Resource Economics and Rural Sciences Australia (ABARES).

Experts took into account the seasonal rains, but lower prices for wheat and higher prices for alternative crops such as chickpeas, lentils and legumes, should also be taken into account.

ABARES in the article about the prospects of the quarter APR-Jun, however, is sticking with his forecast a 5% increase in wheat production compared to last year to 25.4 million tons in the season 2016/17 as a result of the expected increase in yield per hectare.

Wheat prices have shown an almost continuous decline due to strong production from major exporters such as Australia, Russia and the European Union. Chicago wheat futures fell by almost a quarter since July last year.

However, Rabobank on Tuesday said that the heavy rains helped to sow the winter crop-2016/17 in Australia in soils with good humidity and with prospects of the weather phenomena La niña, this has increased the expectations of the wheat crop to 26.7 million tons, 10% higher than last year.

Not expected to increase in the area sown under wheat this season, production increase may be the result of good yield, which, as predicted, will average approximately to 2.09 tons per hectare, said Rabobank analyst.

The Bureau of meteorology reported a 50% probability of La niña. La niña generally brings wetter than normal conditions on the East coast of Australia.

The National Australian Bank economists predict a crop of 26.1 million tonnes in the season-2016/17.

Analysts at Commonwealth Bank of Australia supported the forecast to "default" at about 25 million tonnes at the moment, but said about the risk of yield increase in the case of the formation of La niña.

Source: Thomson Reuters