Rain provides positive outlook for Australian wheat

Good rains have put Australia on course for a rise in wheat production, even though farmers look unlikely to raise plantings much, if at all.

Rabobank analysts hiked their forecast for the 2010-11 wheat crop in the southern hemisphere's largest exporter of the grain by 1.8 million tonnes to 21.8 million tonnes, putting it in line with last year's harvest.

The revision came as Australian Crop Forecasters (ACF) raised its forecast by 800,000 tonnes to 22.5 million tonnes, a figure which would represent a five-year high.

Both groups cited the rains which have blessed much of the country since Christmas, and are expected to continue ahead of plantings, which start later this month.

"East coast winter cropping prospects look outstanding," Rabobank said, adding that farms in Queensland and parts of New South Wales were enjoying among their best conditions of the past 20 years.

Wheat area, which the bank had forecast would drop by some 800,000 hectares, looked now like coming in only slightly below last year's level.

Scott Briggs, a commodity strategist at ANZ Bank, said he did not foresee any huge cutbacks in Western Australian plantings.