June 6, 2008

West Australian grain yield may fall below estimates on dry weather


Western Australia, the country's biggest grain producer, may harvest around 10 to 12 million tonnes of grain this season, lower than early estimates due to dry weather in May.

The grain output last month could hit a record if the weather has been favourable, the state's Department of Agriculture and Food said.

During the same period last year, the state's total grain production totalled of 8.5 million tonnes.

Australia recorded its driest season in May, dimming earlier hopes of the government to double the national wheat production.

Global wheat prices plunged by 42 percent from their February record on expectations of a bigger crop in Australia.

Rob Proud, manager for grain trading company Emerald Group Australia, said that western Australia has put a dampener on grain forecasts.

Wheat futures for July delivery rose 0.25 cent to US$7.86 on CBOT. Prices reached a record US$13.5 a bushel in February 27.