Australia’s early harvest returns suggest high protein wheat could be in short supply in that country.
PentAG Nidera Pty Ltd., an Australian grain marketer, said in a recent weekly market report that protein levels in the crop coming off in central and southwestern Queensland have typically been below 12 percent. A lot of the crop only graded Australian Standard White at 10 percent protein, it added.
“Clearly the market is becoming increasingly concerned over disappointing early harvest quality results,” said the company.
A poor finish to the growing season in northern and central New South Wales and forecasts for more rain in coming weeks in those areas is adding to concerns, PentAG said in its Oct. 19 report.
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Bruce Burnett, director of weather and market analysis with the Canadian Wheat Board, has heard similar reports from Australia.
“For us it is reasonably good news. It does reduce the supply of higher protein wheat the Australians will have to sell in the upcoming year.”
Most of Australia’s quality wheat is produced in Queensland and northern New South Wales. That part of the country is expected to produce a high-yielding wheat crop because of good rainfall during the growing season, but low protein levels often accompany high yields.
“We’re hearing that there isn’t an awful lot of 13 percent Aussie wheat,” said Burnett.
He cautioned that Australia is still in the early stages of a harvest that will last close to six weeks. Signs point to a near record size Australian crop of close to 21 million tonnes.
A poor quality Australian wheat crop would help offset an exceptionally high protein U.S. crop. The average protein content for the 2011 U.S. hard red spring crop is 14.6 percent compared to 13.7 percent last year and a five-year average of 14.2 percent.
Global protein premiums collapsed in the wake of the U.S. winter wheat harvest. Burnett doesn’t think a poor quality Australian crop would lead to a recovery in premiums, but it would make it easier to sell high protein Canadian spring wheat.
However, there is a limited supply of that type of wheat this year.
The average protein content in this year’s Canada Western Red Spring wheat crop is 13.2 percent, compared to the long-term average of 13.5 to 13.6 percent.
Wheat markets will closely watch the Australian harvest to see if growers are in for a repeat of 2010, when late-season rain spoiled the quality of a great-looking crop.
Forecasters say La Nina is making a return, which usually means more wet weather is in store for Australia.
“Everybody is a little on edge,” said Burnett. “We’ll have to monitor the weather pretty closely to see whether Australia has big wet weather problems with their crop.”
Drew Lerner, president of World Weather Inc., doesn’t expect conditions to be too soggy in eastern Australia.
“I’m not thinking we’re going to have a huge problem, but we will have some of the late crop that will experience some more wet weather,” he said.
Harvest weather looks pretty good for the next couple of weeks, but after that Queensland and New South Wales could become wetter.
“There will be some more quality issues but definitely not a widespread serious problem,” said Lerner.
