UPDATE 3-Australia's dry weather wilts Nufarm's profits, raises fears of 2018 harvests

* Nufarm Reduces Profit Forecasts of Australian Division

* Says Viable Harvest Season Is Unlikely in Many Regions

* Warning for Rural Sector – Analyst

* Stocks Fall 10 % SYDNEY, July 23 (Reuters) – Agricultural chemicals company Nufarm Ltd. has trimmed its forecast for its underlying results of the 2018 fiscal year Monday after a drop in demand in Australia for crops, sending his shares up to 10 percent.

An unusually dry weather across Australia, a major agricultural exporter, has hit many rural businesses in the country, but Nufarm is the first to acknowledge that this season's crop production, such as wheat, could fall drastically.

Despite the absence of rain, the company stated that it had anticipated an increase in demand for its products once the crops would have appeared after many Australian farmers were forced to sow in dry soils.

But he had been forced to reevaluate.

"Following comments from Nufarm's teams in the regions … it was determined that the market had reached a turning point, and it was now considered unlikely that a viable farming season would occur in many areas of the country, "said Nufarm. in a report.

It provided a profit before interest and taxes (EBIT) for the year ending 31 July of 255 million Australian dollars to 270 million Australian dollars (190 to 201 million dollars), against 302.3 millions of dollars a year ago. Nufarm, who said his Australian business was suffering from "the driest fall since records began more than 100 years ago," had already dropped its forecasts in May because of the harsh weather conditions in Australia, in Europe and North America.

NO SIGNS OF CHANGE

Nufarm's declining profits are an indicator for the Australian rural sector in general, analysts say, as dry weather shows little sign of slowing.

Australia's leading commodities forecaster reduced its wheat production outlook by 8 percent last month to 21.9 million tonnes, and warned that its estimate could fall further.

Private forecasters have also begun to downgrade their estimates.

"If it stays dry over the next few months, as forecasts predict, it could fall to 13 million tonnes," said James Maxwell, commodity analyst at Profarmer Australia.

This would be the lowest harvest since 2008. Australia generally exports about 18 million tonnes of wheat annually, mainly to Asia.

While the crop prospects on the northeastern coast of Australia are bleak, farmers have said that their season could still be saved with an immediate break in the weather.

"We will have to be very wet, very quickly to return the harvest," said Dan Cooper, a farmer from Caragabal, 400 km west of Sydney.

"It will not be a great year but if we can get an inch of rain, we can get a reasonable harvest."

EBIT DECLINE

Nufarm has forecast the EBIT of its activities in Australia and New Zealand. second sector, from 5 million Australian dollars to 10 million Australian dollars, against 51.6 million Australian dollars a year ago.

Its shares fell 10 percent to a two-year low after the announcement, while shares in the GrainCorp grain manager slid up to 4 percent.

Nufarm added that he expects that the low levels of anticipated demand and the current surplus of supply will limit sales and the margin at the end of the year. fiscal year 2019.

He was also examining the implications of depreciation for the Australian firm.