“Normally, Australia would not have much feed wheat available, but the situation is different this year,” Mitch Morison, general manager of commodities at the Melbourne-based company, said in an e-mailed statement today, without giving tonnage estimates.
A La Nina weather event contributed to Australia’s wettest August-to-October period on record and above-average rainfall may persist into January, according to a Bureau of Meteorology outlook. The weather has boosted crop yields in Queensland, New South Wales and Victoria, while raising concerns that milling- quality grain will be damaged.
“We can presume that a significant proportion of the Queensland crop and northern New South Wales wheat crop will be downgraded in quality this year,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia in Sydney, said by phone today. Further rain would raise the risk of downgrades in southern regions, he said.
Wheat for March delivery in Chicago was little changed at $7.12 a bushel at 4:01 p.m. Melbourne time, trimming this year’s advance to 31 percent.
Feed wheat represented 4.2 percent of Australia’s bulk- wheat exports in the year ended Sept. 30, 2009, according to Canberra-based regulatory group Wheat Exports Australia.
Export Outlook
Australia may ship 16 million metric tons of wheat in 2010-2011, compared with 14.5 million tons in the year ended Sept. 30, the U.S. Department of Agriculture forecast Nov. 10. Production this year may reach 24 million tons, it estimated.
Commonwealth Bank of Australia forecast this season’s crop at 22 million tons, up from 21.7 million tons last year, and exports this season of 15.5 million tons, Mathews said.
“AWB is already making strong export sales of feed wheat, with steady inquiries from customers in Asia and Pacific markets, where we have a significant freight advantage over just about every other origin,” AWB’s Morison said.
Wet weather had delayed the New South Wales harvest by at least two weeks and caused some damage, the state’s Industry & Investment Department winter cereals specialist Peter Matthews said by phone from Temora in the state’s grain belt today.
‘Weather Damage’
“There are some isolated reports coming in of some weather-damaged wheat,” he said. Harvesting in the state is likely to continue into January, he said.
Crops in central Queensland, which account for about a fifth of the state’s output, were downgraded because of rain, Wayne Newton, grains president of farmer group Agforce, said from Dalby on Nov. 12. The harvest was about 10 percent to 15 percent completed in the south as cool conditions delayed progress by about two weeks, he said. More rain is expected this week, according to the Bureau of Meteorology.
In Victoria, crops were less advanced and weekend rain hadn’t caused damage, Chris Sounness, a Grains Project Manager at the Department of Primary Industries, said today.
The U.S. is forecast to be the largest wheat exporter in 2010-2011 followed by Canada and the European Union, according to the USDA.
(Source: http://www.businessweek.com/news/2010-11-16/australia-feed-wheat-shipments-to-increase-awb-says.html)
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