Australian grain prices are expected to further increase, with diminishing harvest from extreme weather conditions in Australia and worldwide.

The USDA has reduced estimates for the nation's wheat crop by 2% to almost 23 million tonnes.

It has also cut the US autumn corn and soy harvest, and the world's supply outlook due to extreme weather conditions around the globe.

Grain market analyst Mark Martin says continuing extreme weather around the world could push up Australian prices for farmers.

The Australian Bureau of Agricultural and Resource Economics and Scienceshas also shown that 15-20% of southern Queensland's winter grain crop will not be harvested.

Chief commodity analyst Jamie Penm says the harvest could be down by 0.2 million tonnes from the December forecast.