Australia's floods may disrupt grain movement for weeks

Floods in Australia's Queensland could disrput grains supply for weeks, top grains handler GrainCorp Ltd said on Monday, further delaying the transportation to market of the country's waterlogged wheat crop. Even ahead of the latest deluge, Australia's wettest spring on record had damaged the crop quality in the world's fourth largest wheat exporter, stoking supply concerns and pushing up global wheat prices.
US wheat futures rose more than 1 percent in early Asian trade on Monday. "We are unable to move anything by rail or, of course, road," David Ginns, corporate affairs manager at GrainCorp told Reuters, adding that transport of grain to port elevators from inland areas had effectively ceased, and the domestic distribution network had also been impacted. Queensland floods have renewed concerns over wheat supplies, after large volumes of prime quality crop was damaged by rains at the end of 2010. The state would likely ccount for around 1 million tonnes, or about 5 percent of the country's total output this year, according to Ginns.
Crop analysis firm Australian Crop Forecasters expects a total harvest of 24.4 million tonnes, compared with 21.7 million tonnes last year. But it has predicted that 10 million tonnes of this would be downgraded from milling wheat to grains fit for animal feed in Australia, which typically produces little feed-quality wheat. Chicago Board of Trade wheat posted its first yearly gain in three years, rising 47 percent in 2010, erasing the 42 percent combined loss for 2008 and 2009 when ample global supplies weighed on prices.
Prices started surging last summer after a drought in Russia and the Black Sea region decimated the crop there and shut off exports. In recent months, wet weather in Australia and dryness in US wheat areas have raised fears over supplies. Large parts of Australia's coastal north-east have disappeared under floodwaters in a spreading disaster that has brought some of the highest floods on record and forced thousands from their homes.