A forecast of a 2m-tonne drop in Australia's wheat harvest next time has tempered joy at a further upgrade to the country's export prospects this marketing year, as it continues to mop up orders left unfulfilled by trade curbs imposed by the drought-struck former Soviet Union.

Australia & New Zealand Bank raised to 17.2m tonnes, from 16mm tonnes, its forecast for wheat shipments from the southern hemisphere's top exporter of the grain in 2010-11, after data showed the total hitting 1.7m tonnes last month.

The figure was 500,000 tonnes above average, excluding drought years, and it took Australia's total wheat exports for the first half of the marketing year to 9.1m tonnes, 2.1m tonnes more than usually expected.

Bulk vs container 

The boost reflected a doubling in exports to the Middle East, tripling to Bangladesh and a rise of 10 times in shipments to the Philippines, according to government export officials.

And it was notable for buoyant volumes of wheat shipped in containers, which have historically accounted for small portion of trade, as well as in bulk, ANZ analysts said.

"The east coast wheat container export trade has achieved 200,000 tonnes a month over February and March," they said.

The "container dynamic" meant bulk exports could "still underperform", yet Australia achieve bumper shipments overall.

The performance is markedly better than analysts had initially expected, given the, unusual, focus of last year's harvest on the east coast, which has less developed grain logistics compared with Western Australia.

'Alarming dryness' 

However, Commonwealth Bank of Australia took some of the fizz out of wheat sector celebrations by forecasting production at 24.3m tonnes this year, a figure which, while above historic levels, would represent a 2m-tonne drop from last year's harvest.

It is also lower than some other initial estimates for the crop, which Rabobank has pegged at 25.2m tonnes.

The lack of rainfall in Western Australia, usually the country's top wheat-growing state, were "alarming", with "severe moisture deficiencies throughout the majority of the grain belt", and no significant rain expected for at least the next week, CBA analyst Luke Mathews said.

Western Australia wheat plantings will fall by more than 310,000 hectares to 4.5m hectares because of the "persistently dry conditions and poor rainfall forecasts", although a rebound in production from last year's drought-devastated crop could be expected.

This time, the east coast would have limited ability to make up for a below-par Western Australia crop, with a "recent lack of rain" across northern New South Wales and southern Queensland too.

East coast yields are likely to drop 20%, although the region's farmers will sow more wheat, at the expense of barley.