Australia May Harvest 14% Less Wheat Than Forecast

By Madelene Pearson

Oct. 1 (Bloomberg) -- Australia, the world's sixth-largest wheat exporter, may produce 14 percent less of the grain this harvest than previously forecast after dry weather in recent months, National Australia Bank Ltd. said.

Output may be 20.8 million metric tons, Frank Drum, the bank's agribusiness economist, said in an e-mailed report. That compares with National Australia's June forecast of 24.3 million tons and last year's 13 million ton crop.

``We really haven't received the spring rainfall a lot of the country required,'' Drum said by phone. ``Whilst it is a significant improvement on last year, some producers are looking at another year of well below-average wheat production.''

The cut comes after Rabobank Group, JPMorgan Chase & Co. and the Australian Bureau of Agricultural and Resource Economics trimmed production estimates because of below-average rain September. Output could still be lower, Drum said.

``Rainfall over the next couple of weeks is going to help crops in places like South Australia, Victoria, and New South Wales, but it's probably too late to have any significant upside effect on yields,'' Drum said from Melbourne. ``If we don't get the rainfall, there is that potential that it could be lower'' than his current forecast, he said.

Wheat for December delivery dropped 0.1 percent to $6.795 a bushel on the Chicago Board of Trade in after-hours electronic trading at 11:13 a.m. in Sydney. Prices have halved since reaching a record $13.495 a bushel in February.

Canola production may be 1.3 million tons, while output of barley may be 7.4 million tons, National Australia Bank said. Australia produced 1.1 million tons of canola and 5.9 million tons of barley last harvest.

To contact the reporter on this story: Madelene Pearson in Melbourne on mpearson1@bloomberg.net