Hopes for harvests in Australia's top two wheat-producing states took a further trim even as combines began to reap crops which, thanks to dryness, look set to come in well short of initial forecasts.

Australian crops are being closely watched by global markets for signs that it too has fallen prey to the dryness which has hurt US corn and Russian wheat, although rains in many areas late last month have eased concerns for output in the southern hemisphere's top wheat exporting country.

Farm officials in New South Wales warned that yield prospects for winter crops in the second-ranked grain producing state "have dropped through August-September, a result of below-average rainfall throughout the state, and the impact of severe frosts.

"The majority of the winter crop is now in need of rain," the officials said, estimating the state's wheat crop at 6.88m tonnes, representing a fall of more than 1m tonnes year on year.

'Further good rainfall needed'

The figure is 180,000 tonnes below the latest forecast from Abares, Australia's official commodities bureau.

And the state officials warned that a downgrade was "certain… if no further rain events eventuate in the next 10-14 days" in areas avoided by downpours late last month.

"Further good rainfall is needed across the entire state to consolidate this year's crop."

Nonetheless, the state's canola crop was pegged at 964,300 tonnes, above estimates from Abares and the Australian Oilseeds Federation, which have lower figures for planted area.

Western Australia trim

Separately, CBH Group, which handles effectively all the grains crop in Western Australia, the biggest producing state, trimmed to 9.1m-9.3m tonnes, from 9.5m tonnes, its forecast for receivals of grain, the great majority of which are of wheat.

Abares has forecast the Western Australia crop of barley, canola and wheat at 10.0m tonnes.

The CBH estimate would be well below the more than 15m tonnes received last year, besides an initial estimate for this year's crop of up to 11m tonnes before "one of the coldest and driest Julys on record hampered crop growth in many areas".

"We then experienced below-average rainfall in August which led to a downward revision of our estimated receivals," Colin Tutt, the CBH general manager operations, said.

However, he added that "some good rains in September have ensured the yields", meaning that the latest crop estimate "should be maintained".

First deliveries

The comments came as Western Australian growers kicked off their 2012 harvest campaign, with the first two deliveries, totalling 70 tonnes, delivered to CBH facilities in Geraldton, and earlier start than is typical.

"We should see growers in the full swing of harvest by mid-November," Mr Tutt said.