SYDNEY, Nov 25 - ABB Grain Ltd, Australia's largest grain group by market capitalisation, said on Tuesday better quality wheat was likely to be in demand despite the world being awash with the grain following bumper northern hemisphere crops.
ABB Chief Executive Michael Iwaniw said prices for most types of grain would remain under downward pressure because of ample supplies, but there could shortages of quality higher protein wheat that Australia grows.
"It is very hard to argue a case for increased grain prices -- the only thing I would say, if there is a shortage of any grain it is high quality wheat, that may influence some premium for quality but generally speaking I would say it (the wheat price) would be around these levels or may be drop a little bit," Iwaniw said.
He said wheat prices could also come under additional pressure as the Australian harvest, now under way, progressed.
Current forecasts put Australia's 2008/09 wheat harvest at about 20 million tonnes, up from last season's drought-affected 13.0 million tonnes crop.
ABB Grain Ltd said poor crops in South Australia meant its receivals for the 2008/09 season would be below normal.
Iwaniw said the group expected to receive 4.0-4.5 million tonnes of grain from the 2008/09 harvest, less than the state's average crop of just under 6 million tonnes of wheat, barley and canola, because of poor spring rains.
Receivals would still be higher than last season's 3.5 million tonnes.
Adelaide-based ABB sources most of its grain in its home state of South Australia.
Iwaniw was speaking at a briefing after ABB reported a more than six-fold rise in annual net profit to A$48.8 million ($31.4 million), in line with expectations.
Earnings were boosted by higher receivals as drought conditions eased in South Australia last season and by a record performance by ABB's malting business, Joe White Maltings, the world's 10th largest maltster.
At 0545 GMT Chicago Board of Trade wheat for December delivery was down 0.37 percent at $5.35-½ a bushell, compared with a record high of $13.49-½ struck on Feb. 27. ($1=A$1.56)