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Wheat Quality in Australia to Drop With Yield on Dry Weather

May 29 (Bloomberg) -- Wheat quality in Australia, once the world’s second-biggest exporter, will probably be lower this year as a dry start to the season threatens to curb yields in some growing regions, according to Emerald Group Australia Pty.

“We had a very dry start to the season,” Chairman Alan Winney said in an interview on Bloomberg Television today. “The wheat in some parts of the country is looking like it might yield a little lower than we originally expected,” he said, forecasting a crop of about 23 million metric tons. Melbourne-based Emerald, the country’s fifth-largest grain marketer, said May 10 production may reach 23.7 million tons.

Australia had the hottest summer on record and below-average rainfall in February and April, according to the Bureau of Meteorology. Farmers started sowing winter crops including wheat about end of April and the bureau forecast this month a wetter-than-normal winter, lifting optimism rain will boost soil moisture. Wheat production is set to climb 13 percent to 24.9 million tons this year, the government estimates.

“The areas that grow the higher protein wheats are probably the drier areas,” Winney said. “It’s possible that there’ll be less of the prime hard and hard wheats and Australian premium white quality.”

Eastern Australia’s grain-growing regions are set for a wetter-than-normal June to August, the bureau said May 22. Parts of New South Wales, last year’s biggest wheat producer, South Australia and Victoria may get as much as 50 millimeters (2 inches) of rain in the four days to June 1, according to a weather model on the bureau’s website.

Wheat futures slumped 11 percent this year on signs global production will increase. The July contract traded at $6.9275 a bushel on the Chicago Board of Trade at 1:45 p.m. Singapore time.

Australia, the biggest exporter after the U.S. in 2011-2012, is set to slip to the fourth position in 2012-2013, according to U.S. Department of Agriculture data. Global output will be 701.1 million tons in the year starting June 1, the USDA estimates.

To contact the reporter on this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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