Australia Cuts Wheat Harvest Forecast 11% on Dry Spring Weather

By Angela Macdonald-Smith

Nov. 5 (Bloomberg) -- Australia, the world's sixth-largest wheat exporter, may harvest 11 percent less than forecast because of below-average spring rainfall.

Production may be 19.9 million metric tons, the Australian Bureau of Agricultural and Resource Economics said today in an e- mailed statement. That compares with a September forecast of 22.5 million tons, which had been cut from a June estimate. Last year's drought-reduced crop was 13 million tons.

Global output may rise to a record this fiscal year after farmers sowed bigger crops to benefit from a 77 percent surge in prices last year. Australia & New Zealand Banking Group Ltd. last month said Australia may harvest less than the government's September forecast after a lack of rainfall in cropping regions.

``A lack of spring rainfall across Victoria, South Australia and southern New South Wales has resulted in a marked deterioration in the major winter crops,'' the Canberra-based government forecaster said in the report. ``Despite the poor spring in some areas, total wheat production is forecast to be around 7 million tons about last year's drought-affected harvest.''

Wheat futures have slumped 58 percent from a peak of $13.495 a bushel reached on Feb. 27 as forecasts of a record world harvest weighed on prices. Futures for December delivery yesterday rose 1.9 percent, to $5.725 a bushel on the Chicago Board of Trade.

Global growers are expected to harvest a record 683 million metric tons in the year ending June 30, the International Grains Council said Oct. 30.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdoaldsm@bloomberg.net