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Australian wheat crop quality at risk due heavy rains

By Naveen Thukral

SINGAPORE, Oct 11 (Reuters) - Widespread rains in Australia's eastern grain producing states is likely to hit the quality of the wheat crop which is scheduled to be harvested at the end of the year, traders and analysts said.

Wheat quality downgrades in Australia are set to deepen concerns over global food supplies, with the world heading towards the tightest grain inventories in years as Russia-Ukraine war curbs exports and adverse weather reduces production.

Heavy rains eased across Australia's east on Monday, a slight relief for flood-weary residents but authorities warned another intense weather system could hit several inland regions bringing more downpours and triggering flash flooding.

Northern Victoria state, southern New South Wales (NSW) and northern Tasmania should brace for widespread rains of up to 100 mm (4 inches), about a quarter of Australia's annual average, over two days from late Wednesday, the Bureau of Meteorology said.

"Nearly half the wheat crop, or around 6-7 million tonnes, is at risk of quality downgrades in NSW ," said Ole Houe, director of advisory services at agriculture brokerage IKON Commodities in Sydney.

"We could end up having large volumes of feed quality wheat on the east coast."

Australia is on track for a third year of bumper wheat production as near-perfect weather earlier in the growing season and higher planting boosted crop prospects.

Wheat planting in Australia takes place in April-May and harvesting starts in November. The country is a key supplier of food quality wheat to buyers in Asia, the Middle East and Africa.

"Importers might have to look at other origins for supply of high protein wheat," said one Singapore-based trader. "There will be more pressure on suppliers in North America to ship high-quality milling wheat."

Global wheat prices jumped to a three-month high on Monday with the escalation of fighting between Russia and Ukraine underpinning the market. (Reporting by Naveen Thukral; Editing by Michael Perry)

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