November 20, 2008


Eastern Australia wheat crop likely downgraded after rain


Wheat crops in Australia's northern New South Wales region will likely suffer some quality downgrades after heavy rainfall this week, GrainCorp Ltd's. managing director Mark Irwin said Thursday (November 20).


Some areas in this region received between 50 and 100 millimetres in the 24 hours to early Wednesday (November 19) while larger areas received 25-50 mm - and more since - according to data from the government's Bureau of Meteorology.


Some wheat lands in southern Queensland received 50-99 mm in the 24 hours to early Thursday, with more falls to the south confirming that November has been a wet month for the region.


Irwin said that the intake of grain, which is mostly wheat, into GrainCorp's upcountry storage system was averaging 250,000 to 270,000 tonnes a day early this week and the company was hoping to see the 300,000 tonne/day mark reached, but harvesting slowed sharply as the rain fell.


"Certainly the grades will come off from where they were a week ago, but probably not as much as people think," Irwin told reporters and analysts in a telephone briefing.


The Land weekly farm newspaper Thursday reported some of the wheat delivered to the grain storage at Moree - a major wheat growing centre in northern New South Wales - have "shot and sprung (sprouted)...and the high humidity and low protein means what is left may be downgraded as a result of the rainfall".


Northern New South Wales and southern Queensland typically are the source of Australia's best-quality high-protein milling wheats. If the rain continues and the crops do not dry out quickly, these high-quality wheats could be downgraded to general purpose or feed grades. This would mean a considerable loss in value to farmers and further tightening of hard-milling wheat markets.


Irwin does not believe there will be widespread downgrading, despite the look of official rainfall maps.


"As we sit here today, it is probably not as bad as it could have been," he said.


Before this week's rainfall, the harvest was about 10 days behind a normal year, but the rain will likely extend the delay to two weeks - so harvest in northern New South Wales will continue into early December, he said.


Irwin said the rainfall this week and this month sets up the summer sorghum and cotton crops for a good season.


He also believes barley will likely be "short across the country".


The quality of barley in southeastern Australia is not that great so a lot of the quality issues are already there, he said.


Croplands in southern New South Wales, Victoria and South Australia states have been dogged by a dry spring, forcing sharp production downgrades for all winter crops, including wheat and barley, with expectations of more quality issues emerging at harvest, which is gathering pace.


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