The latest forecast, which follows a downward revision from 23.5 million tonnes in October, is still about nine percent ahead of last year's crop of 19.42 million tonnes. The cut to the forecast followed frosts in Victoria and southern New South Wales and hailstorms in central and northern New South Wales, Abare said.

Adverse weather conditions, including excessive rain and frosts, are expected to lead to the downgrading of significant quantities of wheat in many Australian growing regions. Abare said the harvest has been delayed in most regions following cool weather and intermittent rainfall. The new forecast further reduces Australia's 1998-99 wheat crop from the near record expected earlier, after the biggest ever crop of 23.7 million tonnes in 1996-97.

Abare said WesternAustralian wheat production was expected to be a record 8.1 million tonnes, but harvesting has been slow due to rain and cool conditions. Excellent yields in the northern and southern wheat belt are expected to partly offset frost damage in the eastern wheat belt.

About 550,000 tonnes of wheat are estimated to have been lost due to frost. In southern New South Wales, frosts in late October have damaged an estimated 20 percent of crops, with the worst affected area around Cootamundra. Cool weather and storms have delayed harvesting and led to weed infestations, while above average rainfall in the state's north is lowering grain quality.

The New South Wales crop has been revised down to 6.1 million tonnes. South Australian wheat production is forecast at 3.4 million tonnes, up 27 per cent on the previous year. The increase is driven by a larger planted area and above average yields, although the quality is below expectations. Victorian wheat production is forecast at 1.4 million tonnes, down 10 per cent onlast year. Severe frost in late October had led to the loss of 35 per cent of the the crop in the Wimmera, but good rain in early November has benefitted the area's remaining crop. In Queensland, wheat production is forecast to be 2.2 million tonnes, up 47 per cent on a year ago. However, spring rainfall has continued to affect grain quality, with significant quantities of wheat downgraded.