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Australia’s Victoria Wheat Quality May be Reduced by Rain

Dec. 1 (Bloomberg) -- Wheat crops in Victoria, Australia’s fourth-largest producing state, may be downgraded by continuing rainfall as wet conditions delay the start of harvesting, an agricultural department manager said.

“At some stage we need some dry weather and if you look at the weather for the next week, your concerns grow,” said Chris Sounness, grains project manager at the Department of Primary Industries in Horsham. Farmers in the state are still a “week or two” away from gathering crops, he said.

GrainCorp Ltd., the top bulk-wheat hander in the country’s east, last week estimated harvesting was about four weeks behind schedule because of rain and warned more feed-quality grain may curb shipments. Australia had its wettest September-to-November spring on record, and Victoria may have its wettest year since 1992, according to the Bureau of Meteorology.

“Bulk handlers and exporters may receive less grain than previously expected as farmers sell a greater proportion of their crop directly to the local stock-feed sector,” Luke Mathews, a strategist at Commonwealth Bank of Australia, wrote in a report. Traders who had forward sold for December-January would be “becoming nervous” about meeting deadlines, he wrote.

Wheat for March delivery jumped as much as 4.3 percent to $7.2 a bushel on the Chicago Board of Trade and was at $7.0724 at 5:14 p.m. Singapore time.

Victoria’s late-developing wheat crop was less susceptible to damage from recent rainfall than more mature crops and likely escaped widespread damage, Sounness said.

‘Underwater’

“There is going to be some crop that’s underwater that might become unsalvageable but for the majority, the issue is getting it dry to get it harvested,” he said. Barley crops had been downgraded, he said.

Falls of between 25 millimeters (1 inch) to 100 millimeters are forecast in the state’s grain region through to Dec. 8, according to the Bureau of Meteorology.

Australia’s wheat output may total 22.3 million tons, with Victoria gathering 3.3 million tons, according to Commonwealth Bank of Australia. Harvesting begins in Queensland and progresses southward to Victoria.

The state may produce 4.6 million tons of wheat, 2.8 million tons of barley, 523,000 tons of canola and 160,000 tons of lentils, Victoria’s agriculture department said Nov. 10

To contact the reporter on this story: Wendy Pugh in Melbourne wpugh@bloomberg.net

To contact the editor responsible for this story: James Poole at Jpoole4@bloomberg.net

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