Millers in the UK are waiting nervously for the Australian wheat harvest to come in later this autumn, with high global wheat prices and volatility expected to continue.

The Australian crop is still in the ground and harvesting is not due to complete until the end of November or beginning of December.

The US Department of Agriculture had estimated the crop at 21 million tonnes on September 12, but private analysts are now suggesting it may well be closer to 18m or as low as 13m due to drought conditions, according to Lewis Wright, head of wheat trading for ADM Milling. "This will not be clear until the start of 2008 so a prolonged period of volatility and price uncertainty is likely to continue, with high grain prices likely to remain," he said.

"The harvest in Australia is not looking great," said Gary Sharkey, head of wheat procurement at miller Rank Hovis. "The drought in Australia means we are expecting to see the harvest down on what we previously predicted. After three weeks, for every week that Australia does not get rainfall, it will lose one million tonnes."

Bread wheat price offers (delivered to Liverpool) are now in excess of £210 per tonne, a steep rise from July, when the price was £160. Last year the price was below £100 per tonne, Wright told British Baker. Daily prices are changing by £5-£10 per tonne compared to £1-£2 per tonne a year or two ago.

In the UK, the harvest period was extended due to poor weather through August, which has given rise to quality concerns.