Australian officials stoked concerns over the availability of quality wheat, saying prices were set for a relatively small decline in 2013-14, amid fresh concerns over rain damage to the Russian crop.
Abares, the Australian commodities bureau, trimmed by $10 a tonne to $305 a tonne its forecast for average prices of hard red winter wheat in US Gulf of Mexico ports in 2013-14.
Nonetheless, while representing a 9.5% drop year on year, the price forecast reflected a better result than that growers achieved for their 2011 harvest.
At $8.30 a bushel, the price is also a little above current values, with the Gulf basis, according to Benson Quinn Commodities, at $1.45 a bushel above December hard red winter wheat futures, which were trading at $6.93 a bushel in Kansas City on Tuesday.
Higher vs lower protein
Indeed, the forecast decline in values hard red winter wheat, a higher protein type, "is less than the expected falls in prices of other varieties of wheat on world markets", Abares said.
"This reflects an expected smaller increase in world production in 2013–14 of higher protein wheat varieties, including US hard red winter wheat.
"By contrast, production of lower protein wheat varieties, including France class 1, US soft red winter wheat and Australian premium white wheat, is forecast to rise more substantially."
'Struggling with wet conditions'
The comments tally with rising market concerns over quality, highlighted by Macquarie earlier this month, although the bank took a more bullish line on supplies of lower-protein milling wheats too.
They are being fuelled by fresh worries over rains in Russia, where fresh rains have reduced hopes for a late boost to supplies of quality wheat.
"Russia is struggling with wet conditions on the tail end of their wheat harvest, which has raised more concerns about the overall quality of the Russian crop," Brian Henry at Benson Quinn Commodities said.
Abares said, of Russia: "Rainfall in parts of the north-east growing region has slowed the harvest and raised concerns about wheat quality, adding that in Ukraine, "rainfall during the harvest period has resulted in a downgrade of crop quality".
However, on Kazakhstan, it said that a later growing season meant wheat would "benefit from recent rainfall without the adverse effects on quality".
World production upgrade
The comments came as Abares lifted by 5m tonnes to 690m tonnes its forecast for the world wheat harvest in 2013-14, including a 3m-tonne upgrade to 141m tonnes in the estimate for the European Union crop.
The US crop was upgraded by 3m tonnes to 58m tonnes, but the Russian harvest was downgraded by 1m tonnes to 52m tones.