UN upbeat over prospects for 2014 wheat crop

The United Nations signalled the potential for a further rise in world wheat production in 2014, even as it raised its estimate for this year's crop to a record high.

The UN's food agency, the Food and Agriculture Organization, said that "overall wheat plantings for the next harvest could increase slightly compared to last year" after a, broadly, decent autumn sowing window, and with prices encouraging the grain too.

"With wheat production generally remaining relatively more profitable to other crops in many regions, winter wheat plantings have increased in some major producers," the FAO said.

"These early indications point to an overall larger global wheat area for harvest in 2014," with winter crop accounting for most wheat sowings in major growing countries, notable exceptions being Canada and Kazakhstan.

Winners and losers

The FAO acknowledged the setbacks from persistent rains to autumn sowing in Russia and Ukraine, saying that "adverse autumn weather had a more significant disruptive impact and plantings are reported to be down in both [countries]".

However, winter wheat sowings are seen higher in China, the top producing country, and potentially India.

In the European Union," despite some adverse weather in parts during the planting period, the aggregate winter wheat area is estimated to be up by about 4%".

And in the US, "early indications suggest that the winter wheat area could be slightly up from the previous year" after a "generally ideal planting season".

Furthermore, crop condition in the US is "overall much better" too.

In the EU, "the negative impact of sowing delays in some parts, particularly central and eastern France, was largely offset by rapid early development of crops, promoted by above average temperatures and ample moisture supplies".

Raised supply hopes

The idea of raised world wheat area for the 2014 harvest tallies with a forecast from the International Grains Council last week that harvested area will rise by 1.4% to 222.9m hectares, if a little below an earlier estimate.

It also represents a further boost to hopes for world wheat supplies, after upgrades this week to official estimates for Australian and, in particular, Canadian harvests this year.

The FAO itself lifted its forecast for the 2013 world crop by 2.3m tonnes to 710.8m tonnes, a record.

However, this estimate may be subject to revision, appearing to have been made before the Australian and Canadian upgrades.

Food prices ease

The estimates came as the FAO revealed a small drop in world food prices last month, with its price index falling by 0.3 points to 206.3 points, taking the year-on-year decline to 4.4%.

The November fall was led by a 5.3% month-on-month decline sugar prices, "mainly attributable to improved harvesting operations in Brazil, the world's largest sugar producer and exporter", the FAO said.

"Speculations of a possible surge of exports from Brazil and India, owing to the weakening of currencies against the US dollar in November exacerbated the price slide."

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