Australia's key sugar-growing district of Queensland is bracing for more drenching of its early crop, with flash flooding and mudslides and a possible cyclone predicted to accompany torrential downpours over the holiday weekend, forecasters said.
But this year's lingering wheat crop centred further south in New South Wales state, may be spared the latest deluge, allowing more crops to dry out and harvested in what forecasters are predicting will be a bumper crop of more than 26 million tonnes.
"The jury is still out just how much quality wheat this year's harvest will produce," Australian Crop Forecasters analyst Gaven Warburton said. Estimates have varied widely - from 20 percent to 60 percent - over how much Australian wheat will be unfit for milling, given unseasonably heavy rains over the last two months that has decimated cropland.
Wheat quality is threatened when the moisture content of stored grain exceeds 15 percent, introducing risk of infestation and mould. US wheat futures have been supported in recent weeks by adverse weather hitting crops in Australia, the world no. 3 exporter, as well as the United States.
Chicago Board of Trade front-month wheat has risen by about a fifth so far in December, the biggest monthly gain since July when the grain market jumped more than 40 percent as a severe drought ravaged crops across the Black Sea region. Australia's unusually wet spring has already pushed both coking coal and thermal prices sharply higher, as well, with thermal coal, a benchmark for Asia, climbing to a 2010 high over $120 per tonne this week as coal mines wrestle with flooded collieries. Australia exports more coal used in steelmaking than any other country and is also a major producer of coals for power generation.
Australia this month slashed its current year sugar export forecast by 25 percent as flooding reduced sugar content of cane and more rain could further damage the crop. The damage has helped propel sugar prices to 30-year highs and forced the nation's biggest sugar exporter, Queensland Sugar Ltd (QSL), to buy more raw sugar from Brazil and Thailand to meet its export commitments following the wettest spring on record. Australia, along with Brazil and Thailand, are the world's biggest exporters of sugar for the world market.
Most of the eastern state of Queensland is expected to be awash under a monsoon downpour later on Friday as the deluge dumps hundreds of millimetres along the entire length of the already rain-soaked state, according to weather forecasters. Emergency crews and disaster groups have been activated ahead of a fast-moving tropical storm cell forecast to hit north of Cairns early Saturday, local media said.
Australian Bureau of Meteorology senior forecaster Jim Davidson told reporters the focus was on the "very active" monsoon trough that could remain a threat until early January. He said within the next 24 hours the bureau will be more certain whether a cyclone could develop on Monday. There's some chance it could develop into a tropical cyclone," he said. "We're getting ready just in case." New York's March raw sugar contract on Thursday jumped 0.85 cent, or 2.57 percent, to end at a 30-year settlement high of 33.98 cents per lb. London's March white sugar futures soared $36.40, or 4.64 percent, to end at $820.90 per tonne.
The town of Theodore, west of the Bundaberg sugar district in southern Queensland, has been isolated by the floods, according to forecaster Weatherzone. Storms have been battering more than 2,700 kilometers of eastern Australia during an unseasonably early start to the December-March wet season Up to 18 percent of the 2010 sugar crop has been left unharvested due to heavy rains in November and December that decimated growing regions, with next year's plantings also showing damage even before the latest rains are due to hit.
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