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Australia's winter crop outlook takes more positive turn

Rabobank

Australia’s winter crop outlook has turned around in recent weeks, with timely rainfall and improved soil moisture levels across several key grain-growing regions lifting production prospects compared with earlier projections, according to Rabobank.

 

After a late, dry start to this year’s winter crop in many parts of Australia – which had led to expectations of below-average production – the national winter crop is now, in mid winter, in average to good development condition, the specialist agribusiness bank said in a recently-released podcast.

 

Speaking on the RaboResearch podcast Australia's 2026/27 crop update: from a late, dry start to strong prospects, Rabobank senior grains and oilseeds analyst Vitor Pistoia said the national crop picture had “really, really changed” following a run of rainfall events that helped establish crops and rebuild grower confidence across much of the country.

“The models and the feeling and the vibe really changed here in the country,” Mr Pistoia said. “We are potentially going for an average season now – no longer below average.”

However, he said, with an El Niño increasing the risk of below-average spring rainfall through the growing season, there was cause for caution about how the crop would finish, particularly across southern Queensland and northern New South Wales.

 

For now, RaboResearch said, the latest seasonal indicators point to national wheat production in the range of around 27 million to 30 million tonnes – assuming no major dry spells during spring and with continuing adequate supplies of farm inputs – supported by improving yield prospects.

 

Mr Pistoia said crop models had already been showing a lift in wheat yield potential in early July, with the improvement equivalent to about 0.2-0.3 tonnes per hectare in some modelled outlooks.

 

 While the ultimate crop size will still depend heavily on spring rainfall, he said, the “downside risk” had eased compared with earlier in the season.

 

“Things do change,” Mr Pistoia said. “A few months ago, this season was looking like it could be below average. Now, if spring can do enough of the job, Australia has the potential to print big numbers again.”

 

South Australia and Victoria leading the improvement

 

RaboResearch says South Australia is among the current standout regions when it comes to cropping, with very favourable conditions across the Eyre Peninsula after early rain in late February and March created valuable subsoil moisture. Follow-up falls through May, June and early July have left crops looking strong across wheat, lentils and other winter crops.

 

The bank says the season in parts of South Australia is now tracking as one of the more positive in the national winter-crop belt, although some lower-lying areas would benefit from a drier spell and sunshine to reduce waterlogging pressure.

 

In Victoria, conditions through the Mallee, Wimmera, north-east and parts of central Victoria have also been strong, with mild June weather helping crops advance rapidly, while July was closer to average.

 

RaboResearch says many crops are now two to three weeks ahead of normal development, raising yield potential but also increasing frost sensitivity.

 

“That is something that has developed to this point of the season – the big concern with frost,” Mr Pistoia said.

 

RaboResearch says average spring rainfall would likely be enough for many Victorian cropping regions to finish with above-average yields, provided frost events do not cause material damage.

 

NSW and southern Queensland remain rainfall dependent

 

In south-west New South Wales, the podcast heard, the Griffith region remains more variable, with a wide spread of planting dates and limited stored soil moisture following a dry summer. Early-sown canola has been a standout where it received timely rain, with some crops flowering unusually early.

 

However, RaboResearch said, this region will need average to above-average spring rainfall to fully realise yield potential, as many crops remain reliant on in-crop rain rather than stored subsoil moisture.

 

“If the tap turns off, then it won’t be so pretty,” Mr Pistoia said, summarising the risk for rainfall-dependent areas. “If average to above-average rainfall arrives, those regions can still be looking very good towards the end of the season.”

 

In southern Queensland and northern New South Wales, late-May and early-June rainfall allowed seeding to be done within time, although rainfall volumes since have not been substantial.  

 

RaboResearch said as a result of the late May rainfall, there was a reduction in the number of paddocks under fallow, which eased the price pressure on grains markets in that part of the country. 

 

 

 

 

Big canola potential for WA, but rainfall timing critical

 

Western Australia’s season is also broadly positive, the RaboResearch podcast said, with strong conditions in the mid-west, the far north of the grain belt and the Esperance region.

 

“Establishment has generally been good, although parts of the WA southern grain belt remain drier and would benefit from additional rainfall through August and September,” Mr Pistoia said.

 

The bank said canola was a major feature of this year’s season in WA, with very large planted area and the possibility of record supply if spring conditions support grain fill.

Some canola paddocks are developing unevenly after patchy germination, but the crop is established and growers remain confident it can catch up, the podcast heard.

 

“There is a lot of canola in Western Australia,” Mr Pistoia said. “It is a record-high season for area and potentially could be a record-high season for total production.”

RaboResearch said average rainfall in August and September would be enough for many WA cropping regions to achieve solid yields, and potentially above-average yields in areas that had a strong start.

 

Bigger crops may weigh on prices

 

The bank said while the improved production outlook was a positive development for national supply, price-wise “the upside is more modest”. Global wheat markets are already being pressured by robust northern hemisphere supply prospects, while canola remains better supported by oilseed and biofuel demand, it said.

 

Mr Pistoia said the price outlook would be heavily influenced by how the crop finishes through August, September and early October, as well as “what happens across the multiple ongoing conflicts worldwide”.

 

“There is plenty of barley and canola also, and that will play heavily with the price outlook,” he said. “The major watch now is grain filling – if spring holds, Australia can move from a below-average concern to a much more constructive production story.”

                       

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Rabobank Australia & New Zealand Group is a part of the international Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has more than 125 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 35 countries, servicing the needs of more than nine million clients worldwide through a network of more than 1000 offices and branches. Rabobank Australia & New Zealand Group is one of Australasia’s leading agricultural lenders and a significant provider of business and corporate banking and financial services to the region’s food and agribusiness sector. The bank has 87 branches throughout Australia and New Zealand.