If conditions are right, this year's winter crop could come be even bigger than the 34.8 million tonnes forecast by ABARE yesterday, according to Rabobank.
Rabobank senior analyst Wayne Gordon told The Australian Financial Review that ABARE's wheat forecast was similar to what the bank was expecting, but he added the harvest could end up much larger if there were favourable weather conditions.
However, the value of this crop might be reduced if world wheat prices continue to drop.
After rallying in recent months as hedge funds returned to commodities markets, global wheat prices have dived about 9 per cent in Australian dollar terms since June 1 and are expected to trend lower in coming months, amid predictions of growing global inventories.
Mr Gordon said big crops in Australia and overseas could push wheat prices down to $US5/bushel, less than half of the peak wheat prices at the height of the soft commodities boom early last year.
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