Rabobank Cuts Australian Wheat Production 1MMT

Rabobank lowered their estimate for 2008 Australian wheat production today to a range of 19-23MMt from 20-24MMT.

Their estimate could be downgraded further if there is a deterioration in crop conditions between now and harvest, they said.

Benchmark ASX Jan wheat closed A$8 higher on the news.

There was also some book-squaring after recent heavy losses ahead of todays USDA S&D report.

The USDA to reduce its estimate for U.S. 2008-09 wheat ending stocks, raise its forecast for world wheat production and lower its estimate for Australian production from last months 25MMT.

Meanwhile storms raged through Queensland overnight generating wind gusts to 59 km/h and a temperature drop of eight degrees in 30 minutes at Longreach. Storms also swept through Brisbane’s west late in the afternoon, bringing heavy rain, localised flooding and small hail.

The storms developed rapidly as warm, moist air was pushed inland by humid northeasterly winds. Widespread thunderstorms should again develop on Saturday and Sunday afternoon across southern and western QLD before becoming isolated early next week.

Western Australia, which produces almost half the country's wheat, remains rather dry and is the main area of concern where ouput could be significantly reduced without beneficial rains soon.