Ko will take a three-shot buffer into the third round at Adelaide's Kooyonga Golf Club after keeping her overnight lead on Friday with a composed three-under-par.

Ko is 10 under overall with American Emma Talley next best at seven under.

But decorated Australian Webb crashed in her bid to claim a sixth national title.

Starting her second round at two under, Webb birdied her first hole on Friday but the wheels fell off en route to a six-over 78 - she finished four shots above the cut line.

Webb has missed the cut in four of her past five LPGA tournaments since August's British Open.

The best-placed Australians entering Saturday's third round are Minjee Lee - the world No.17 is the top-ranked local in the field - and Stephanie Na, both at two under.

New Zealand's former world No.1 Lydia Ko is also two under.

Australian Hannah Green had moved to five under at one stage on Friday before a late collapse. She bogeyed her last four holes to finish one under.

The pacesetting Ko is an 11-time tournament winner - 10 on the Korean Tour and another in a LPGA co-sanctioned event last year in her homeland.

And, tellingly for the 22-year-old, one of those victories was a wire-to-wire triumph.

"So I know how I can do it," said Ko, who was the 2015 British Open runner-up.

"I like this course style.

"Korean courses (are) more long and narrow ... but here is wider, so stress is less."

Ko's Korean compatriots feature prominently on the midpoint leaderboard.

Jiyai Shin, who won the 2013 Australian Open, and Sun Young Yoo are equal third at six under.

Another Korean, Hyejin Choi, is a further two shots back at four under, while South Korea's defending champion Ha Na Jang is among a bunch of golfers at three under.

Australian Associated Press