This would be down from the 5.92 million tonnes produced in 1997/98. It is the agency's first tonnage forecast for barley production in the new year.

Useful rains in April and May provided a very good start to the winter coarse grains season across much of Australia's grain belt, ABARE said in its latest report. Coarse grains plantings were well under way in almost all major grain producing areas.

"However, a continuing poor price outlook for coarse grains in expected to result in plantings falling by eight per cent to 3.9 million hectares in 1998/99," it said.

Assuming normal seasonal conditions through to harvest, total Australian winter coarse grains production in 1998/99 is forecast to fall by nine percent to 6.9 million tonnes, it said.

The largest contraction was expected to occur in the area sown to barley, which is forecast to fall by nine per cent to just under three million ha in 1998/99, it said.

Early reports on growers' planting intentions indicated some swing out of feed barley into malting barley, resulting in higher forecast malting barley production in 1998/99, it said.

This reflected growers expectations of feed barley prices falling more than malting barley prices and the availability of new malting barley varieties, it said.

Barley growers in Western Australia were expected to reduce planting by 12 per cent to 830,000 ha in 1998/99 despite a very good start to the season, it said. The barley area was forecast to fall by 10 per cent in South Australia and eight per cent in Victoria, it said.

However, if dry conditions continued over the next few weeks barley plantings might increase in both states as barley performed better than most other crops in dry conditions, it said.

InSouth Australia, the area sown to malting varieties was expected to increase considerably at the expense of feed barley, it said.

Barley plantings in New South Wales were forecast to fall by about five percent from last year, it said. But in another look at the country's wheat scenario, ABARE said it has boosted its forecast 1998/99 production to 19.3 million tonnes from its previous forecast of 18.43 million tonnes.

The latest forecast production represents a rise of about four per cent from Australia's 1997/98 wheat production of 18.55 million tonnes.

The increased production forecast follows widespread rain in April and May which had eased farmers fears, ABARE said in its latest Australian Crop Report.

The organisation has increased its forecast for cotton lint production in 1997/98, but has cut its forecast for 1998/99.

ABARE put 1997/98 production at a record 666,000 tonnes, or 2.9 million 500 pound bales, from its previous forecast of 645,000 tonnes.

But the agency cut its forecast ofAustralian cotton production next year to 578,000 tonnes from 653,000 tonnes previously.

The diminished outlook for next year's cotton crop was because of cuts in water licences in most areas of the state of New South Wales (NSW), ABARE said in its latest Australian Crop Report.

The new forecast for 1997/98 production at 2.9 million bales is also slightly below recent industry estimates of 3.0 million bales.

Harvesting of Australia's 1997/98 cotton crop began around the middle of March, one of the earliest starts on record, ABARE said.

"It is estimated that 2.9 million bales (666,000 tonnes) of lint has been produced from 434,000 hectares, setting a new record for Australian production," it said.

Cotton plantings in 1998/99 were forecast to fall to 390,000 ha, with the area of irrigated cotton forecast at 317,000 ha, about 11 per cent below 1997/98, ABARE said.

The expected fall was due to cuts in water licences in most cotton growing regions in NSW because of environmental flow rules introducedby the water reform process.

ABARE said Australian prices for cotton remained strong, and water availability was expected to be the limiting factor for cotton production in 1998/99.