November 7, 2005

 

Australian wheat crop at risk from too much rain

 

Australia's bumper wheat crop harvest of which was gathering momentum, could be at risk from too much rain, a commodity analyst at Commonwealth Bank of Australia said Monday.

 

If a significant part of the new crop was damaged by rain and downgraded to feed status, this would put added pressure on an already wide global price spread between hard and soft wheat, Tobin Gorey said.

 

Gorey was commenting after plentiful rains through eastern and southern Australia in the past two months.

 

More heavy rains were expected in coming days in south-east Australia.

 

Many wheat growing areas in South Australia state received an unseasonably heavy 25 to 49 millimetres of rain in the 24 hours to early Monday, according to data from the government's Bureau of Meteorology.

 

Gorey said too much rain late in the growing season can lead to deteriorating crop quality, such as mature grain sprouting in heads before harvest, which can lead to a downgrading to feed status.

 

"If things go wrong, it's going to be because of too much rain, not too little at this stage" particularly in eastern Australia, he said in a brief interview.

 

By and large, winter crops including wheat have received enough rain to take them through to a big harvest, which was usually completed by year-end, he said.

 

"It probably won't go far off a record crop this year, if things go right from here," he said.

 

Gorey projected wheat output to be 23 million to 25 million tonnes, in line with that of bulk wheat exporter AWB Ltd. (AWB.AU).

 

After domestic demand of about 5.5 million tonnes was met, the remainder of production was available for export, making Australia a major global supplier.