Lower protein wheat persists in Australia, seen in central NSW

SYDNEY Thu Nov 22, 2012 12:13am EST

SYDNEY Nov 22 (Reuters) - Wheat gathered in central New South Wales contains less protein than expected, traders said, further tightening supplies of top quality wheat from Australia, the world's second-largest exporter of the grain.

Stocks of high-protein wheat were already under pressure as harvests in northern New South Wales and Queensland, the states that produce top quality hard wheat, have also shown reduced protein levels.

Flour milled from high-protein wheat is used to produce food such as high protein breads and is often exported to Asia to make noodles.

"We are seeing a lot of low protein wheat and barley," said Chris Kochanski, general manager at Southern Ag Grain.

"It's certainly a lower protein year than most expected and early indications are it will be a lower than average protein year."

Global wheat stocks have tightened in recent months on expectations of smaller crops in key producer Argentina, dry weather in the United States and fears of export curbs by Russia and Ukraine.

Chicago Board of Trade wheat has climbed close to 1 percent this week and more than 35 percent since mid-June.

RAIN AGAIN

Lower than average protein levels are another blow to Australia's overall wheat output, already set to be well down on last year's record crop after dry weather in Western Australia, the largest wheat producing state, stunted yields.

However, CBH Group said indications from harvests across Western Australia suggest all grain production in the state is likely to surpass 9 million tonnes, the upper end of their forecasts, with wheat expected to account for approximately 6 million tonnes.

Meanwhile, heavy rains have hit New South Wales and Queensland in recent days, but farmers said crop quality has largely been unaffected.

The Australian Bureau of Meteorology in its seasonal outlook forecast unseasonably wet weather for the summer across northern New South Wales and Western Australia, areas that analysts said would likely have completed harvesting, minimising the impact on crops. (Reporting by Colin Packham; Editing by Joseph Radford)

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