* Australian 2012/13 wheat output f'cast cut to 24.1 mln T
* Western Australia likely to drive smaller production
* Drier weather in coming months to impact production
* El Nino weather pattern a risk for crops
* U.S. wheat prices rise on concern over global output
(Recasts, adds quote)
By Colin Packham
SYDNEY, June 13 Australia slashed its winter
wheat production forecast by more than 7 percent, heightening
g l obal supply worries and boosting U.S. futures, a day after
projections of harsh weather hitting output in top exporters
Russia, Europe and the United States.
Australia, typically the world's fourth-biggest exporter,
estimated its crop would be almost one-fifth smaller than last
year's record harvest, also citing dry conditions.
The slide in Australia's wheat estimates came after the U.S.
Department of Agriculture forecast harsh weather would shrivel
global production, providing a lift to flagging wheat prices.
Benchmark U.S. wheat futures, which had fallen just
over 5 percent this year on worries about global economic
troubles hitting demand, rose half a percent on Wednesday.
"A reduction is Australia's production estimate is slightly
supportive for the market even though there are still ample
global supplies," said Lynette Tan, an analyst with Phillip
Futures in Singapore.
The Australian Bureau of Agricultural and Resource Economics
and Sciences (ABARES) forecast a crop of 24.1 million tonnes,
citing average-to-dry growing conditions so far this year.
The forecast compares with an estimate of 26 million tonnes
in March and comes after last year's record 29.5 million tonnes.
Australia is seen climbing the ranks to emerge as the No. 2
exporter in the current crop year ending in September, thanks to
two straight years of all-time high output.
"The start of the 2012/13 winter cropping season has been
characterised by average to dry conditions, which has led to
generally dry upper layer soil moisture profiles," ABARES said
in its latest quarterly crop report.
Australia's barley production was forecast to fall by 15
percent to around 7.3 million tonnes, while canola output was
seen up 4 percent to around 2.9 million tonnes, ABARES said.
The lower forecast for wheat production had been widely
expected by the market, although it was a bigger reduction than
the consensus forecast of a Reuters poll last week indicating a
4 percent cut in the government's March estimate.
LOWER GLOBAL OUTPUT
Australia's wheat output forecast came almost 2 million
tonnes below the USDA's estimate in its June demand and supply
report on Tuesday, which cited harsh weather curbing supplies in
Russia, Europe and the United States.
"It is two million tonnes of wheat you are losing in
Australia when all areas in the world that produce milling wheat
will be down year-on-year other than North America," said an
analyst who was not willing to be named due to his company
"The availability of higher quality of wheat in the world
will be lower relative to last year."
Global wheat output is projected to decline to 672.1 million
tonnes in 2012/13, from 694.2 million tonnes a year earlier but
still higher than 651.1 million tonnes in 2010/11, according to
Wintertime frost and dry spring weather reduced Russia's
wheat crop by 5 percent, said USDA, which listed losses in
European Union nations, Turkey and the United States.
BIGGEST DROP IN WESTERN AUSTRALIA
The biggest decline in Australian wheat production was
forecast for Western Australia, where moisture stress is
expected to cut output by just over a quarter to 6.9 million
tonnes in 2012/13, according to the crop report.
ABARES noted recent rains in Western Australia, Australia's
biggest producing and exporting state, but said the unseasonably
dry weather between March and May meant upper level soil
moisture was dry and much of the crop was dry sown.
The country's Bureau of Meteorology estimates the chances of
exceeding median rainfall from June to August 2012 in the
Western Australian grains belt at between 20 and 40 percent.
In New South Wales and Queensland, where Australia's premier
quality wheat is grown, ABARES said it expected 12.2 million
tonnes of wheat to be produced. It forecast a 13 percent decline
in yields in New South Wales and a 9 percent slip in production
in Queensland on the back of lower plantings and a fall in
yields from the record high last year.
ABARES noted crop-friendly weather conditions were forecast
in coming months.
The weather bureau outlook for June to August 2012 indicated
wetter than average conditions across Queensland and northern
New South Wales cropping regions and generally average
conditions for much of southern New South Wales, the report
Wheat production in South Australia is forecast to hit 3.9
million tonnes, 5 percent down from last year, ABARES said.
Lower production is being driven by a decline in planting, with
more farmers planting canola in response to lower wheat prices.
Even though wetter than average weather is expected between
June and August 2012 in the east coast, all seven of the models
the Australian Bureau of Meteorology tracks from global
compatriots indicate an increased likelihood of the El Nino
weather pattern returning later in the year.
"An El Nino essentially implies a fair bit of dryness in the
east coast as a general rule, and if it hits around August when
rains are important for crop development, it implies a fair bit
of downside risk to the crop outlook," said Michael Creed,
economist, agribusiness, at National Australia Bank.
(Additional reporting by James Regan in SYDNEY and Naveen
Thukral in SINGAPORE; Editing by Ed Davies)