Australia received significant rains earlier this week helping establishment of the wheat crop. According to Farm Progress market analyst Arlan Suderman, although there are still some dry areas, showers covered most of the Australian Wheat Belt and more could be on the way.
"Going forward we anticipate that we'll see more showers, particularly favoring the western part of Australia," Suderman says. "Eastern areas are going to be lacking the moisture we like to see to sustain crop conditions. Southern areas saw some spotty showers as well, but overall we're looking at dryness continuing to be a problem on a quarter to as much as a third of the winter Wheat Belt."
At this point Suderman says that's not a concrete number, but it does keep it on the front burner.
"It's not enough of an issue to rally the market around but it does provide some underlying support," Suderman says. "It keeps end-user buying strong, because end-users don't want to be caught short counting on a big Australian crop like they were last year."
Last year Australia harvested just over 10 million tons of wheat due to a devastating drought. However reports from Australia say that even with average rainfall, this year's crop could potentially break the record harvest set in 2003. A big factor in that is the increased acreage of wheat, which is up 13% this year to more than 14 million hectares.