By Rod Nickel

WINNIPEG, Manitoba (Reuters) - Crop-killing frostswept through much of the Canadian Prairies for the secondstraight night Friday, lowering the quality of the country'swheat, canola and oats.

Killing frost also hit north-central Alberta on Friday,while spreading into most of the top crop-growing province ofSaskatchewan.

"It's definitely going to have an effect on quality, nodoubt about that," said Canadian Wheat Board Chairman AllenOberg, who farms at Forestburg, Alberta.

On average, 62 percent of Western Canada's spring wheatreaches the top two quality levels prized by millers andbakers, but this year the Wheat Board had already expected thatlevel to fall to 45 percent. With the latest frost, the board,one of the world's biggest grain marketers, will likely lowerthat estimate again, Oberg said.

Canada is the world's biggest exporter and producer ofspring wheat, as well as the top shipper of canola andrapeseed.

"Our big concern is that we have enough No. 1 wheat for ourquality customers like Japan," Oberg said.

The board's last forecast, for 19 percent of farmers'spring wheat grading the highest quality, would still give itample supplies, he said.

Frost, which kills plants when temperatures fall to minus2.2 degrees Celsius (28 degrees Fahrenheit), arrived on time inWestern Canada but damaged the quality of crops because manywere immature and vulnerable after farmers planted them late.

The region's harvest is moving at its slowest pace in sixyears due to excessive rain.

The expectation that Canada will produce smaller andlower-quality crops this year has boosted ICE Canada canolafutures and U.S. wheat, soybean and oat futures this summer.

To a greater extent, severe drought in Black Sea countrieshas pushed wheat prices to two-year highs and left markets moresensitive to weather problems around the world.

North American crop futures markets reopen on Sundayevening.

Killing frost on Friday night covered most of central andsouthern Saskatchewan, with temperatures falling as low asminus-6 Celsius (21 degrees Fahrenheit). NortheasternSaskatchewan areas around Yorkton, Hudson Bay and Nipawinescaped with above-freezing temperatures or light frost, saidEnvironment Canada meteorologist Robert Paola.

Saskatchewan produced 48 percent of Canada's canola croplast year, 52 percent of the country's oats and 44 percent ofits spring wheat.

Saskatchewan's harvest was most advanced in southern areasand less than 10 percent complete in the rest of the provinceas of Sept. 13, although farmers had cut additional crop thatwas likely mature enough to withstand frost.

Severe frost in northern Saskatchewan growing regions thatproduce much of Canada oats could lower oat quality belowmilling standards, said Oatinsight.com analyst Randy Strycharin a recent note to clients.

Frost also hit southwestern Manitoba around Brandon onFriday night, while much of southern Alberta had either lightor no frost, Paola said.

Killing frost looks to move further east on Saturday nightinto western and south-central Manitoba before leaving thePrairies on Sunday, he said.

"It's been a very unusual year," Oberg said. "Delayedseeding was bad enough but when you have a very wet summer withcool weather, that's put us in the position where we're at."