Prospects for the 2002 grain crops have deteriorated sharply in the past two months due to continuing widespread dry conditions. It is reported by the official Meteorology office that in the first five months of the 2002/03 winter cropping season (April-August) serious to severe rainfall deficiencies were recorded over most Australian grain belt. Total wheat production is now officially forecast to decline to 13.5 million tonnes, 10.5 million tonnes down from last season and the smallest crop since 1994/95. Barley production is forecast to decrease by 39 percent from last year’s record crop to 4.6 million tonnes.