SA woman not guilty of daughter's murder

An Adelaide woman has been found not guilty of murdering her two-year-old daughter because she was mentally incompetent at the time.

Catherine Anne Pallin, 40, was charged with murdering Ayeesha Aqua Pallin, whose body was found on a rural property in the Adelaide Hills in July 2013.

In the Supreme Court on Monday, Justice John Sulan found Pallin not guilty, saying she was mentally incompetent at the time of the offence.

Psychiatric reports showed Pallin was suffering from acute psychosis as a result of chronic paranoid schizophrenia.

She was "unable to reason, with a moderate degree of sense and composure, about the wrongfulness of her actions" as a result of her illness, the court heard.

Justice Sulan said he would place Pallin on a supervision order at a later date.

He remanded Pallin on continuing home bail to face court again in February.