* Cold weather to limit Western Australia output - analysts * Australian wheat production set to fall to 10-year low By Colin Packham SYDNEY, Sept 17 (Reuters) - Widespread frost has dented hopes that wheat growing areas in Australia’s west could provide a much needed boost to output, analysts and traders said on Monday, further tightening supplies amid a prolonged drought. Australia, the world’s fourth largest wheat exporter, expects production of its largest rural commodity to hit a 10-year low this season at 19.1 million tonnes, as drought across the country’s east wilts output. Many private forecasters had pegged production from Western Australia at above the 9.6 million tonnes recently estimated by the country’s chief commodity forecaster. But as temperatures plummeted over the weekend and meteorologists warned of further cold weather this week, analysts said estimates were being quickly wound back. “There were some in the market that were expecting 12 or even 13 million tonnes. That won’t happen now,” said Phin Ziebell, agribusiness economist, National Australia Bank. “It will be a struggle to get to double figures.” Tight supplies from Australia will add to concerns over global shortfalls that helped push benchmark prices to a three-year high last month. Lower production from Western Australia may limit the country’s exports. Australia typically ships out more than two-thirds of its production, but with drought drying out grazing and crop land across the country’s east coast, domestic millers and livestock producers are likely to dominate consumption. Major customers of Australian wheat such as Indonesia will be forced to look to alternative markets for their supplies, a boost to the export prospects of the United States and South America particularly. For Australia, the adverse weather in Western Australia darkens the economic outlook. The Reserve Bank of Australia in August warned that the severe drought along the east coast would cause a potential headwind to the economy. Reporting by Colin Packham; editing by Richard Pullin
Hopes of a boost to Western Australia's wheat harvest after a prolonged drought in the east of the country have been dented after a widespread frost with predictions of more to come. The Bureau of Meteorology said it was expecting temperatures above average for most parts of Australia on Monday and Tuesday but warned that some areas could see up to 20 centimetres of snow by Wednesday. Australia is the world’s fourth largest wheat exporter and its biggest customers such as Indonesia may have to turn to other sources of grain such as the US and South America.