Australia may be on course to beat Canberra wheat forecasts by a distance, Australian Crop Forecasters has said, as grain handler ABB Grain reported the first grain deliveries from this season's harvest.

ACF raised its central forecasts for the crop by 1.1m tonnes to 23.1m tonnes, ahead of domestic official and private forecasts.

And it said it was prepared to raise the estimate further, depending on weather conditions.

"Barring a major catastrophe such as severe frost, there's still potential for a crop somewhere above 23m tonnes and even 24m tonnes if we get some favourable rain this month," the group said.

That would also beat the US Department of Agriculture forecast, which was raised last week by 500,000 tonnes to 23.5m tonnes.

"Yield gains in the rest of [Australia's] wheat belt will likely offset the poor outcome in Queensland and southern New South Wales," the USDA said.

Winners and loser 

The forecast puts the country on course for a large improvement from last season's harvest of 21.4m tonnes. But it still has some way to go to beat the 25.2m tonnes in 2005-06.

ACF said that its revised forecast reflected higher hopes for Western Australia – the country's biggest wheat producing state, for which the harvest estimate was raised by 1m tonnes to 8.7m tonnes - and for South Australia.

Hopes were trimmed for New South Wales, Australia's second ranked wheat growing state, which continues to suffer from a scarcity of rainfall.

Dollar hurdle 

The revision came as ABB Grain, the grain handler, reported the first barley deliveries from South Australia this season "signalling that the start of harvest proper is not far away".

However, price prospects have yet to improve, despite the recent rallies in Chicago, Kansas and, to a lesser extent, Europe.

AWB, the rival grain handler, on Monday cut its forecast for its 2009-10 wheat pools  - bar durum – by Aus$5 a tonne, the fourth cut since July, citing the continuing appreciation of the Australian dollar.

"While international cash prices and US wheat futures are slightly higher since the last pool update, the strength of the Australian dollar continues to have a negative impact on Australian wheat export prices," AWB general manager commodities, Mitch Morison, said.

Farmers in the western pool can now expect Aus$250, with those in the east, the centre of domestic demand, to get Aus$258 a tonne.