There is a "high risk" of further cuts to wheat crop estimates among major producers, Barclays Capital has warned, as Kazakhstan continued the round of grain harvest downgrades.

BarCap analysts forecast a "higher price profile" for the second half of the calendar year, as further poor news emerges from the producers troubled by poor weather, a band which includes Canada, the European Union and the former Soviet Union.

"The potential for further weather-related downgrades remains high," the bank said.

"We would not rule out further price support from lower production estimates, with further downgrades likely to Russian wheat production in particular as drought conditions continue to stress the crops there."

'Extreme drought' 

The comments came as Kazakhstan's agriculture minister, Akylbek Kurishbayev, cut to 13.5m-14.5m tonnes, the official forecast for grain production in the Black Sea state, where crops have, as in neighbouring Russia, been hurt by dry and hot weather.

His deputy Arman Yevniyev two weeks ago pegged the crop at 14.5m-15m tonnes.

Mr Kurishbayev, while noting "extreme drought", termed the latest forecast "promising".

Short-covering

BarCap also flagged the potential for short-covering to "fuel further price upside" for wheat.

Latest regulatory data showed that non-commercial investors remain short, by a net level of more than 36,000 positions over long holdings, if less so than earlier in the year,

Nonetheless, wheat continued to struggle for a third successive trading day on international markets, closing down 0.9% at $5.77 a bushel in Chicago.

London wheat for November ended 1.0% down at £125.45 a tonne, although its Paris peer crawled out of negative territory to end up E0.25 at E168.00 a tonne.