Frosts occurred around the southern NSW towns of Wagga Wagga, Young, Gundagai, Albury and Burrinjuck, where temperatures fell to about zero, a spokesman for the Bureau of Meteorology told Reuters.

These areas cover a wide expanse of the wheat growing district in NSW.

The bureau spokesman described the frosts as "not severe" in temperature terms, but enough to cause possible damage to the wheat crop.

"There's likely to be one or two more tomorrow (Thursday) morning, particularly on the higher parts of the slopes and ranges," he also said, noting that the frosts had occurred as Australia approached the end of the frost season.

"There's a lot of concern about it," agricultural futures broker Phil Lindsay of Ord Minnett Jardine Fleming Futures said of the effect of the overnight frost on the wheat crop.

The main fear was thatthe frost would produce pinched, or small-sized, grain, he said.

Australia's wheat crop, thought to be headed for a near-record tonnage about two months ago, has already been hit by frost in Western Australia, rain and floods in northern NSW and Queensland and drought in Victoria.

The overnight frost comes just days after significant damage to the wheat crop from very heavy rain in Queensland.

Official assessments are yet to be made of the extent of crop damage from the Queensland rain and from the overnight frost in NSW.

The government commodities forecasting agency the Australian Bureau of Agricultural and Resource Economics (ABARE) last week cut its forecast of the wheat crop to 21.9 million tonnes from 23.5 million tonnes because of weather damage.