Europe's wheat crop is to buck the global trend of falling production, boosted by low rates of winterkill, higher plantings and abundant rains in southern countries.

The European Union wheat harvest will rise by 6.2m tonnes to 145.1m tonnes in 2010-11, narrowly behind the record set two years ago, a flagship report from the US Department of Agriculture said.

The improvement reflected benign growing conditions for a crop boosted by increased seedings, after farmers ditched barley, for which Europe has canned intervention support.

"Excellent planting conditions in most of Europe last autumn were followed by low winterkill rates and favourably high spring soil moisture levels," the USDA said.

"Yield improvements over last season are expected to be particularly strong in the normally drier climates of southern European countries where rainfall has been abundant during winter and spring."

Furthermore, winterkill rates would be "minimal", after a snow covering protected crops from a harsh winter.

Smaller harvests

Europe's prospects leave it the only major producing region set to increase output, with farmers in many countries abandoning the crop in the face of weak prices.

"The sown area of winter wheat was about the same as [2009-10], but winterkill losses were higher due to localised damage caused by fall dryness, January frost, and ice crusting," the USDA said.

America's own production will fall by 7.8% to 55.6m tonnes (2.04bn bushels), with better yields of Oklahoma and Texas only making up in part for a slide in domestic sowings.

Price reaction

World wheat inventories will end 2010-11 at 198.1m tonnes, their biggest for nine years, with America's closing the season at a 23-year high.

The forecasts for the US "may have come down some" from some earlier estimates, "but they are still big", Mike Mawdsley, at broker Market 1, told Agrimoney.com.

At Country Futures, Darrell Holaday said data was "certainly not supportive to price",  adding that "the market will not find any significant buying support until a significant crop problem develops"

Nonetheless, wheat for May delivery stood 3.5 cents higher at $4.86 a bushel in late trade in Chicago, with July wheat adding 0.25 cents to $4.94 a bushel.

"It's often the case that people sell out before a report on the expectation of some weak data. And then when the report arrives with the data they expected, there is nobody left to sell," Mr Mawdsley said.