March 7 (Bloomberg) -- The global wheat harvest may climb 4.3 percent from the previous season, reaching the second-highest on record, as European farmers expanded acreage while yields rebound in Russia, the United Nations’ Food & Agriculture Organization said.
World output may total 690 million metric tons this year, compared with 661.8 million tons a year earlier, the Rome-based FAO said today in an online report. The harvest would be second only to the 2011 record. Wheat planting in the European Union may be about 3 percent bigger than a year earlier and weather conditions have been “generally favorable.” Ukraine may also see a “large recovery” in output after satisfactory winter conditions, the FAO said. Russia and eastern Europe had dry weather last year.
“We should have a season ahead of us that could be in a little more comfortable balance than the season in 2012-13,” Abdolreza Abbassian, an economist at the FAO, said in a phone interview before the report. Russia and former Soviet Union countries “had a particularly bad year in 2012, so the expectation is that they will have a recovery. The weather situation has been better so far.”
Wheat futures rose as much as 0.9 percent today to $6.8975 a bushel on the Chicago Board of Trade, before paring gains. The price slid to an eight-month low yesterday. Wheat, the best performing commodity in 2012 in the Standard & Poor’s GSCI gauge of 24 raw materials, is down 12 percent in 2013. In Paris, milling wheat has dropped 7 percent this year on NYSE Liffe.
Russia may harvest 53 million tons of wheat, up 39 percent from production of 38 million tons in 2012, the FAO said. Output in Ukraine may jump 23 percent to 19.5 million tons and Kazakhstan’s crop may surge 48 percent to 15.2 million tons. Production in the EU may climb 4.5 percent to 138 million tons.
China and Pakistan may have record wheat crops in 2013, at 121.4 million tons and 24.7 million tons, respectively, the FAO said. India’s crop was pegged at 92.3 million tons, 2.7 percent smaller than the record 94.9 million tons harvested in 2012.
Production in the U.S., the world’s largest wheat exporter, may drop by 6.1 percent to 58 million tons because of drought in the southern Great Plains. Australia also faces uncertainty before planting begins in April because hot weather has reduced soil moisture. The UN still pegged the country’s crop at 23 million tons, up 4.1 percent from 2012.
Corn production in Brazil’s first-season crop may rise 9 percent this year because of ample rainfall, allowing planting of the second-season crop to progress under favorable moisture conditions, the FAO said. Argentina’s crop may rise to a record 25.5 million tons as yields recover from drought in the previous season, making up for an 8 percent drop in planting. More rain is needed in the country to maintain yields.
Corn production in South Africa may be near a record at more than 13 million tons, the FAO said.
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