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Analysts Predicting Bigger Drop in Australian Wheat Crop

Private companies disagree on what wheat production will be in Australia.

Early last week Rabobank predicted an Australian wheat harvest of 20.5 million metric tons, the USDA pegged it at 21.5 million tons and Ron Storey of Australian Wheat Forecasters predicted the crop in a range of 20 million to 22 million tons.

However; on Friday several others weighed in on the issue forecasting lower numbers. According to Mark Martin, risk management adviser and director at commodity manager MarketAg, national production won't be more than 19 million tons given poor crops in parts of southern New South Wales, Victoria and South Australia. Keith Perrett, chairman of the government's National Rural Advisory Council, also said he sees the national crop around 19 million tons.

The crop in northern New South Wales and the eastern part of Australia are exceptional this year, but Bryce Knorr of Farm Progress says dry conditions are hurting the rest of Australia's wheat crop, and rain this week is expected to be spotty. Also the effects of a late September frost in Western Australia are not yet known, but some crop loss is expected.

"We are seeing a gradual reduction in the size of the crop there," Knorr says. "Still much better than they've seen the last two years when they suffered back to back years of really devastating drought."

Even if the harvest is only 19 million tons that would still be nearly a 50% increase over the actual output of 13 million tons last year.

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