Australia Cuts Grain Crop Estimate 31% on Dry Weather
September 18th, 2007We’re pouring on the joy and happiness today…
Via: Bloomberg:
Australia cut its forecast for barley, wheat and canola crops 31 percent on dry weather, adding pressure to shrinking world supplies that have driven up prices.
Total grain output may be 25.6 million metric tons in the harvest starting October, the Canberra-based Australian Bureau of Agricultural and Resource Economics said today in a statement. That compares to its June estimate of 37 million tons and last year’s drought-ravaged crop of 15.7 million tons.
Wheat futures rose to within 13.25 cents of the record reached last week as demand outpaces supply and inventories head for a 26-year low. Crop expectations in Australia, vying with Canada to be the world’s biggest wheat exporter after the U.S., are being cut after below-average winter rain.
“In the environment we are in, with such low-level stocks, you’re going to see quite a bit of volatility in prices around these supply shocks,” Justin Smirk, senior economist at Westpac Banking Corp. said today from Sydney. `It’s quite possible that you could push up through the record again.”
Also contributing in the rise of food crop prices is that some of crops are now being used for biodiesel.. as most people generally think of it being from used vegetable oil, business uses fresh oil.