The wheat harvest in Australia is ending on a mixed note with yields holding up, and in some cases exceeding forecasts, but quality continuing to provoke some disappointment.

In Western Australia, typically the country's biggest grain-growing state, crop handler CBH said that  overall grains production was well on track to meet estimates of 8.5m-9.0m tonnes, reaching 8.46m tonnes with the last 6% yet to be harvested.

In some areas, including Esperance and Geraldton, receivals had already beaten expectations.

However, Duncan Gray, the managing director of CBH's Geraldton operations, flagged that the site had "noted deterioration in quality" over the past week, blamed on harvest rains.

Indeed, CBH, which handles virtually all the Western Australia crop, had rolled out more than 100 machines testing for Hagberg falling numbers, which test for the damage to grain accelerated by harvest rains.

"Fortunately, this year many growers were well into their wheat programmes when the damage became evident, unlike last year when our falling number units were in use with less than 10% of the crop delivered," said David Capper, CBH's group grain operations manager.

'Consistent trend'

In New South Wales, farm officials on Friday nudged higher by 73,000 tonnes to 6.38m tonnes their estimate for the wheat harvest, typically the second biggest producer after Western Australia.

While yields had been "variable", hurt in some areas by persistent dryness, the state had seen a "consistent trend of crops on well-maintained fallows and those sown on time performing above what growers expected", the officials said.

And the dryness meant that "weather damage to wheat crops has been very limited, with only isolated reports of low falling numbers compared to the two previous seasons", when harvest rains meant that "a large tonnage of the New South Wales harvest was downgraded".

'Low proteins in cereals was universal'

However, the officials added that "low proteins in cereals was universal across much of the state", meaning a shortfall in deliveries of some higher milling grades.

"The percentage of deliveries into higher grades, such as Australian Hard and Prime Hard classifications, will be down this year, compared to historical deliveries across New South Wales."

"The main [wheat] grain quality issue this year has been low grain protein, showing a consistent trend right across the state's production zones."

The lower protein was blamed on high nitrogen prices and "tight availability" of urea at a time of reduced soil fertility, after two years of bumper yields, besides on "milder temperatures through grain-filling in spring".

'Good rain desperately needed'

The officials added that the dryness which had speeded the New South Wales harvest, leaving it virtually completed, had wrought a "major impact" on sowings of summer crops.

Plantings of dryland cotton, for which the seeding window is now closed, have tumbled by 76% year on year, while many crops which have been sown "have continued to struggle", showing "patchy establishment and now lower-than-ideal plant populations".

"Good rain is desperately needed across the entire north-west to allow the bulk of the forecast sorghum crop to be sown and further sowings of sunflowers and mungbeans.

"For many growers in the more marginal summer cropping regions, paddocks earmarked for summer crop will now be fallowed through for winter crop plantings."

'Period of strong exports'

Separately, AWB, the Australian grain handler, raised hopes that crop deficiencies would not deter buyers, with the Cargill-owned group reporting "increasing demand from our international customers for lower quality Australian wheat".

While flagging a "reduced" wheat crop in "key export states", AWB said that "the domestic supply-and-demand balance sheet suggests the market will remain well supported as we enter a period of strong exports to consumers of Australian grain that need cover over the next six months".

Furthermore, a disappointing harvest in Argentina, the second-ranked wheat exporter in the southern hemisphere, "will create additional demand for Australian wheat in the first half of 2013", AWB spokesman Richard Williams said.

"Demand for Australian wheat remains strong at the current prices into Asia, the Middle East and East Africa."