Australia Wheat Forecasted to Rise 40% in 2020/21
Australia's chief commodity forecaster is predicting a 40.4% rise in wheat production this year.
The forecast from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) is predicting 2020/21 wheat production at 21.3 million tonnes (MMT).
Last year Australia production fell to a twelve year low of 15.17 MMT amid a severe drought.
ABARES assumes that recent rains will incentivize farmers to plant more acres.
ABARES said it expected farmers to sow 12 million hectares of wheat this season, up from 10.1 million hectares planted a year ago.
Australia is among the world's top 10 exporters of the grain.
Planting starts in May.
FBN’s Take On What It Means For The Farmer: We view that a recovery in Australian planted wheat acres and production is expected and is a potential negative for the US wheat export program.
US Federal Reserve Bank Cuts Overnight Lending Rate
On Tuesday, the Federal Reserve cut its benchmark rate by a half percentage point to help stem potential economic disruptions from the spreading coronavirus epidemic.
Tuesday’s cut lowered the federal-funds rate to a range between 1% and 1.25%.
The action was approved unanimously and the Fed in a statement held out the prospect for further stimulus.
While this coronavirus shock isn’t primarily economic in origin, Fed officials recognized it would hit U.S. growth.
While an interest-rate cut won’t address the cause of the downturn, it could soften collateral damage to spending and confidence, stem financial-market disruptions and speed a recovery once any epidemic is under control.
The first time the Fed has cut rates outside its normal schedule of policy meetings since the financial crisis in 2009.
FBN’s Take On What It Means For The Farmer: While we view the Fed’s decision to cut the overnight lending rate as a potential supportive move for the listed US commodity futures as global risk assets can flow into to complex. We also believe that cutting the lending rate can be a positive for the US farmer as it can help keep bank lending rates low.
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