Australia has credited timely rains for an increase of 750,000 tonnes to its forecast for wheat production, but warned that further rainfall was "crucial" to ensuring the crop hits its potential.
The harvest will hit 22.7m tonnes, the best for four years, Australian Bureau of Agricultural and Resource Economics said, raising its forecast for total winter grain production by 1.2m tonnes to 36m tonnes.
The increases reflected in the main "average to above average winter rainfall" in Western Australia - the country's main wheat growing state - South Australia and Victoria, with grain plantings also 328,000 hectares higher than previously forecast.
The comment follows weaker signs of a strong El Nino weather pattern setting in, bringing widespread drought, as many forecasters feared two months ago.
'Lack of irrigation water'
However, dry weather was still a threat, with some crops in southern New South Wales, the second biggest producing state, having already failed because of drought and "the yield potential of most others declining rapidly".
"Rainfall in the spring months is crucial for crops in all regions to reach current potential," Dr Terry Sheales, the Abare deputy executive director, said.
The caution was echoed in a separate report from Australian Crop Forecasters, a private group, which slashed its estmate for the wheat harvest by 1.5m tonnes to 22.0m tonnes, citing damage caused by hot and dry weather to north eastern districts.
"The Western Australian crop is in very good condition but to achieve the number Abare is forecasting the crop needs a really good spring and we're not forecasting that at this point in time," ACF said.
Abare said that official weather forecasts showed a "moderate to strong shift in the odds" favouring below average spring rainfall in eastern Australia, with prospects improved for the south west.
The dearth of rain in Australia's winter already looked likely to cut planting of summer crops, such as cotton and rice, by 5%, "reflecting the continued lack of irrigation water", Dr Sheales added.
Exports raised
Australia's wheat stocks now look on course to rise by 283,000 tonnes during 2009-10, rather than falling by 192,000 tonnes as previously forecast.
Modestly higher hopes for exports - which were pegged at 15.5m tonnes, 228,000 tonnes more than forecast in June - and consumption will mop up only part of the raised harvest.
Abare also lifted its forecast for the country's barley harvest by 185,000 tonnes to 7.90m tonnes, the best since 2005-06,with the estimate for oats output raised by 29,000 tonnes to 1.36m tonnes.
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