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Australian Weekly ABARES Report


17 August 2012

Australian Weekly ABARES Report - 16 August 2012Australian Weekly ABARES Report - 16 August 2012

Most climate models indicate that continued warming of the Tropical Pacific Ocean may exceed El Niño thresholds by the end of September 2012. This may lead to drier conditions in eastern Australia and warm daytime temperatures across southern Australia during spring.

The Australian Bureau of Agricultural and Resource Economics and Sciences

As of mid-August, nearly half of the mainland United States (excl. Alaska) was classified as being in severe to exceptional drought by the United States National Drought Mitigation Centre. The dry conditions have had an adverse effect on US summer crops, in particular corn and soybeans, putting upward pressure on world grains prices (see the section Grains and oilseeds – effects of US drought for details).

World grain prices have risen significantly over the past few months, with the world wheat indicator price (US no. 2 hard red winter, free on board Gulf ports) averaging around US$362 a tonne in the week ending 14 August 2012. This compares with a recent high of US$381 a tonne on 20 July 2012 and US$260 a tonne in mid-May.

The world coarse grains indicator price (US no. 2 yellow corn, free on board Gulf ports) averaged around US$328 a tonne in the week ending 15 August 2012, compared with a recent high of US$358 a tonne on 20 July 2012 and US$274 a tonne in mid-May.

The world soybean indicator price (US soybeans, cif Rotterdam) averaged around US$667 a tonne in the week ending 9 August 2012, compared with a recent high of US$692 a tonne in the week ending 26 July 2012 and US$569 a tonne in mid-May.

The world cotton indicator price (the Cotlook ‘A’ index) averaged US83.9 cents a pound in the week ending 15 August 2012, largely unchanged from the previous week.

The world sugar indicator price (Intercontinental Exchange, nearby futures, no. 11 contract) averaged US20.5 cents a pound in the week ending 15 August 2012, around 5 per cent lower than in the previous week.

Commodities

The world cotton indicator price (the Cotlook ‘A’ index) averaged US83.9 cents a pound in the week ending 15 August 2012, largely unchanged from the previous week.

The world sugar indicator price (Intercontinental Exchange, nearby futures, no. 11 contract) averaged US20.5 cents a pound in the week ending 15 August 2012, around 5 per cent lower than in the previous week.

According to the Chinese Bureau of Statistics, China's sugar production from January to July 2012 period was 10.84 million tonnes, 16.4 per cent higher than for the same period in 2011.

Climate

Colder than normal temperatures have reportedly delayed the growth and harvest of vegetables in Queensland. The reduced supply may drive up the price of some winter vegetables over the coming weeks.

Pulse Australia is advising lupin growers in Western Australia to apply manganese to crops before they set seed after one of driest Julies on record. Significant soil moisture deficits can limit the uptake of manganese from the soil, leading to manganese deficiency and poor establishment and growth of lupin seedlings next season.

Up to 10 millimetres of rain is forecast for the northern cropping zone of South Australia in the coming week. Crops in these areas will be heavily reliant on rainfall over the coming weeks to sustain winter growth.

Climate indicators such as the Southern Oscillation Index, trade winds and temperatures of the Pacific Ocean are showing a trend consistent with the development of an El Niño event. Most climate models indicate that continued warming of the Tropical Pacific Ocean may exceed El Niño thresholds by the end of September 2012. This may lead to drier conditions in eastern Australia and warm daytime temperatures across southern Australia during spring. No climate models predict a return to La Niña (Bureau of Meteorology ENSO ‘Wrap-up’ 15 August 2012).

Rainfall this week

For the week ending 15 August 2012, light to moderate rainfall was recorded across southern Australia and areas on the south-east coast, with minimal rainfall received elsewhere. The highest measured rainfall total for the week was 120 millimetres at Comboyne on the NSW central coast. For further information, click here.

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