October 22, 2008

Dry weather in the southeast has forced Australian Wheat Forecasters Pty Ltd. to cut its estimate for the Australian crop to be harvested by year end to 20 million tonnes from 21 million tonnes forecast on October 3.

"Conditions have remained dry, particularly around southeast Australia so this week we have revised our forecast down again to 20 million tonnes," Gavin Warburton, an analyst at the consultancy, said.

The crop estimate could drop further because weather forecasts for the southeast indicated little rain ahead, he said.

Production estimates for the national crop mostly fall in a 19 million tonnes-23 million tonnes range, well up from last year's drought-affected output of 13 million tonnes. After domestic demand of around 7 million tonnes is met, the balance is available for export, usually making Australia a major supplier to the global trade.

Warburton said a production estimate for Western Australia state, which historically accounts for almost 40 percent of national wheat output, was cut 7.8 million tonnes from 8 million tonnes previously due to frost about a month ago.

"The frosts have put a slight dampener on things but it will still be a bumper crop there," he said.