ABARES lowered its Australia oat production forecast to 0.980 MMT today. This is up 5.4% from last year’s drought-impacted crop but 32% below the five-year average.
This year’s crop was also impacted by dry/drought with yields falling 12% below the five-year average.
The lower production outlook coupled with reduced carry-in stocks will require commercials oat markets to again ration supplies via higher oat prices.
Western Australia oat prices, the bench market for Aussie oat markets are already approaching six-month highs and trading above the 52-week moving average.
Production fell 22.3% New South Wales this month, 10% Queensland, 5% in South Australia and 23% in Western Australia (WA). Victoria remains unchanged this month (see pg. 2).
The WA reduction is going to put pressure on exporters to supply traditional export markets. Domestic millers will be challenged should be able to find adequate supplies by paying higher prices.
ABARES in their December report said Australian winter crop production, including oats, was adversely affected by seasonal conditions in early spring that were more unfavorable than expected in most cropping regions.
Rainfall was below average and daytime temperatures above average in most cropping regions, which reduced crop prospects in these regions.
Changes to crop prospects in Western Australia and southern New South Wales were the most significant in reducing national production prospects.
Oat yields were below the five-year average in all but one state, Victoria.