Below average rainfall across most of Australia during August has prompted Rabobank to slash its winter crop forecast, with excellent spring rain needed to save the day in many regions.
According to Rabobank's latest commodity reports, Australia's wheat production for the 2008/09 season "remains very much in the balance".
"At this stage, Australian wheat production is forecast to reach 21 million tonnes, an increase of 61pc on year-earlier levels and by 94pc on the year prior to that one," the report states.
It now says a crop of less than 20mt could be on the cards if rain doesn't arrive soon.
"Significantly lower-than-average rainfall in recent months is threatening production, despite a near record planted area this season.
"Australian farmers, encouraged by record-high world wheat prices and the need to improve cash flows following a couple of difficult seasons, are estimated to have planted just over 13 million hectares of wheat in 2008, well above average levels.
"While it remains too early to downgrade national production expectations below 20mt, the dry conditions in recent months have increased the dependence on an 'ideal' spring for the wheat crop this season."
Rabobank says NSW remains the major area of concern with little rainfall in the second half of July and throughout August.
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