July 13, 2012 / 8:57 AM / 6 years ago

Australian wheat yields threatened by cold weather

* Nearly 14 percent of New South Wales wheat production impacted by frost - state

* Crops need good spring weather

* El Nino forecast to return and could mean dry weather

By Colin Packham

SYDNEY, July 13 (Reuters) - Cold weather across Australia’s two largest wheat growing states has slowed crop growth, officials said, threatening yields in the world’s fourth-largest exporter and adding to concerns about the risk of dry weather later in the year if El Nino returns.

The grains market is currently very sensitive to any hint of weather damage after a U.S. heatwave has boosted prices.

Benchmark U.S. wheat prices have jumped around 35 percent in the last three weeks, tracking corn, which has soared on crop damage from the worst drought in the U.S. Midwest since 1988.

Any further shortfall in global wheat supply could stoke further rises in grain prices.

Australia is forecast to produce 24.1 million tonnes of wheat in the 2012/13 season, the government’s chief forecaster said in June, down from last year’s record 29.5 million tonnes on lower plantings.

Wheat acreage is seen at 13.4 million hectares, Australia’s Department of Agriculture, Fisheries and Forestry said, with wheat yields forecast at 1.81 tonnes per hectare.

Western Australia is forecast to be the largest wheat producing state growing 8.7 million tonnes, while New South Wales is expected to grow 6.9 million tonnes, it said.

However, Australia’s wheat season got of to a slow start as plantings were delayed after unseasonably dry weather.

Wheat planting historically begins in May and finishes in June, with most planting in New South Wales and Western Australia now complete.

The New South Wales Department of Primary Industry said new-crop wheat growth had slowed after recent frost and cold weather.

“The cold, frosty weather has made the later crops slower to emerge and build biomass,” Peter Matthews, technical specialist grain services at the Department of Primary Industries New South Wales, said.

An estimated 2.93 million hectares of wheat has been planted in New South Wales, according to state forecasts.

But 198,300 hectares has been sown outside the normal period, Matthews said, with an additional 150,000-200,000 hectares that has either been sown on the “later side” of the sowing window or has struggled to emerge on time because the crops were either dry sown or planted into marginal moisture.

An official at the Department of Agriculture and Food Western Australia said wheat growth was also suffering in the state due to cold weather, although was unable to provide an estimate for the damage.

The impact of the late start could also be mitigated, analysts said, if farmers had switched to wheat seeds that mature over a shorter period or if ideal crop conditions return.

Spring weather conditions in Australia are considered the most important determinant for whether the wheat crop meets yield predictions.

However, the weather picture looks mixed. In the short-term, rains are forecast for New South Wales and parts of Western Australia, which should help supplement good soil moisture.

But weather bureaus across the world are now warning that an El Nino weather pattern is likely to return, which could mean a dry spring for Australian, damaging yields.

The pattern typically brings below average rainfall for the Asia Pacific region, threatening the yields of agricultural crops, while America is often hit by wetter than average weather. (Editing by Ed Davies)

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