A tornado has been observed in central NSW, with a severe weather warning issued for the area.

The Bureau of Meteorology (BOM) earlier issued a tornado warning for areas near Young and Cowra.

The State Emergency Service also issued a watch and act alert, asking people to stay indoors in those areas.

The tornado warning has since been cancelled, but the BOM said severe weather was still likely with possible hail, damaging winds and heavy rain. Loading

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