By Colin Packham
SYDNEY, Feb 9 (Reuters) - Recent rains have improved the outlook for wheat farmers in Australia, the world's fourth largest wheat exporter, putting them on track for a bumper crop - especially if a wet weather La Nina pattern returns as some forecasts suggest.
But as Australia's wheat season is shaping up for near ideal conditions, it is set to contribute to a continued depression of global wheat prices, Wv1 , which linger near five-year lows due to huge stockpiles.
Much of Australia's east coast, which has seen three years of near record dry weather, recorded between 25-100 percent more rain than average during January, data from the Australian Bureau of Meteorology (BOM) shows.
Western Australia - the country's largest grain producing state that accounts for more than a third of all production, saw as much as 300 percent of typical rainfalls during the first month of 2016, according to the BOM.
Further rains are expected, according the BOM, which estimates a more than 65 percent chance of wetter than average weather between February and April, when wheat planting starts.
"There is some renewed confidence from farmers based on the weather and if El Nino passes, which it looks like doing, the signs are quite favourable," said Phin Ziebell, agribusiness economist, National Australia Bank.
The BOM said there is a 50 percent chance of a La Nina.
Dan Cooper, a mixed grain and livestock farmer in Caragabal, 413 kms (257 miles) west of Sydney, and chairman of the New South Wales Farmers Association, said he expects east coast planting to grow significantly.
Australia's chief commodity forecaster will issue its first estimate for 2016/17 production in March.
Global wheat production during the current 2015/16 season is expected to hit record levels and with sluggish demand growth, huge stockpiles remain in storage at the end of the year.
Typically, this would encourage farmers to switch to alternative products, but currency devaluations mean returns from wheat remain elevated, encouraging some farmers to increase production, adding to pressure on prices.
"U.S. farmers sort of got the message from that and cut planting sharply, but still not by enough," said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia.
"Some countries, Australia included, are looking at prices in their local currencies that are only a little lower than last year. Others, such as Argentina, are looking at the highest prices in a decade or more."
If a La Nina event does occur, while it will boost Australia's wheat crop, it typically reduces rain in many key growing regions in the United States, the world's largest exporter, which could reduce U.S. production and support prices.