THE Bureau of Meteorology (BoM) has called the unusual weather spotted near Fisher Park in Grafton a tornado.
BoM severe weather forecaster Mick Logan said they formed in a similar fashion to water spouts.
"The funnel is tied to a cloud," Mr Logan said.
"Usually the surface of the earth will have winds going in different directions.
"This makes the air under the cloud want to rotate. "The cloud above will have an updraft that draws that air into the atmosphere and it makes the air spin faster and faster until you get the funnel cloud."
Mr Logan said Australia was known to have water spouts closer to the coast, but they usually lost power once they started to head inland.
To have a tornado so far inland was even rarer than a water spout.
He also said Australian tornados were known to rip roofs off houses, but were nowhere near as strong as their American counterparts.
"The vast majority of tornados in Australia only reach zero to one out of five on the Fujita Scale," Mr Logan said.
"The way they are formed in the States is different, American tornados are linked to super cell thunder storms."
Lawrence man Danny Foster was on hand to take a photo of the tornado on Saturday. "I was at hockey with the kids," Mr Foster said. "I looked up at the clouds and it formed. It was there for about two minutes." He said the tornado formed near Fisher Park about 2pm.
Mr Logan said he had seen one at Maclean two years ago.
"It's just one of those things, I was in the right place at the right time."