October 20, 2008

Dry weather has forced a 9.5 percent downgrade in an Australian wheat production forecast to 21.0 million metric tonnes from a previous estimate of 23.2 million tonnes, according to analysis issued Monday (October 20) by Citigroup Global Markets.

"Recent drying across the southern acreage has seen a deterioration in crop expectations for the region with South Australia and Victoria (states) the hardest hit," it said.

If the latest forecast comes to pass, output will be well up from last year's drought-affected crop of 13.0 million tonnes.

Citi's estimate is around midpoint of industry expectations, which sit within a range of 19 million-23 million tonnes, about two-thirds of which would be available for export, making Australia a major supplier to the global trade.