Australia's wheat harvest stalled by wet weather

SYDNEY, Nov 20 (Reuters) - Australia's 2008/09 wheat harvest is running more than two weeks behind normal in some parts of the country because of wet weather that might cut the quality of some crops.

Torrential rains killed a woman and troops were deployed to help thousands of people after storms and flash floods hit Queensland state on Thursday, just days after cyclonic weather battered the tropical region. [ID:nSYD411623]

Industry officials said the worst-affected crops were in the southeast of Queensland state and the northern part of New South Wales state, and heavy rain over recent days in these regions has stalled the harvest with more rain likely.

"The harvest is probably two to 2-½ weeks behind where it would normally be in the north with the recent rain so I think they'll still be harvesting up until Christmas," said Mark Irwin, chief executive of grain handling and marketing group GrainCorp Ltd (GNC.AX), on Thursday.

Irwin said the delays came at a time when there was rising demand for the high quality wheat normally produced in northern New South Wales and southern Queensland.

Despite bumper northern hemisphere crops, there were quality issues surrounding some crops, prompting buyers to turn to Australia for higher protein wheat, Irwin said.

"Even though there's a really big northern hemisphere crop, you don't get that protein content that you get out of east coast Australia," he said.

"We've got buyers more interested in us because prices have come back and there's quality protein deficiencies for the Baltic crop so we're in a relatively good position."

Irwin said wheat prices might be close to bottom with underlying demand for good quality grain likely to firm.

"We're seeing growers warehousing more grain as the price has come back with all the hedge funds unwinding positions, that's taken some of the heat out of the pricing and it wouldn't surprise me if some of these prices stabilise going forward," he said.

Australian Crop Forecasters said total crop size for the 2008/09 wheat harvest was likely to be remain around 20 million tonnes but the quality of the crop in some rain-affected areas could be downgraded.

"The rain may cause some sprouting which will see some wheat downgraded to feed quality," said Gavin Warburton, a crop analyst at ACF.

He said some areas of northern New South Wales had received up to 150 millilitres (mm) or about 6 inches of rain in recent days. That compares with an average of 80 mm or 3.1 inches for the entire month of November that the state receives.

"There's real fears that there will be some pretty big downgrading of remaining crops that are still out there in paddocks in northern New South Wales and Queensland," Warburton said, adding that it was still too early to determine the extent of the damage.

"It is going to be a bit of a nervous time for farmers, particularly as they have come off a pretty good year in terms of production," said Warburton.

He said about 50 percent of the northern New South Wales and southern Queensland wheat crop, or about 1.5 million tonnes, was still to be harvested.

Warburton said rain had also slowed the harvest in Western Australia, Australia's top exporting state, with harvesting in the southern part of the state likely to continue into the new year. (Reporting by Bruce Hextall; Editing by Ben Tan)