June 14 (Bloomberg) -- Wheat traders are the most bearish since at least November as the outlook for bigger harvests in the Black Sea region, Australia and Europe is raising competition for export markets and sending prices lower.
Eighteen analysts surveyed by Bloomberg expect wheat to fall next week, while seven were bullish and a further two were neutral. A majority of traders in the survey are predicting lower prices for a second week.
The world’s farmers will harvest 696.9 million metric tons of wheat in 2013-14, up 6.1 percent from the previous season and close to the 2011-12 record, the U.S. Department of Agriculture forecasts. The United Nations’ Food & Agriculture Organization predicts output will rise to a record.
“For next season, if you want wheat you’ll find it pretty much anywhere,” said Clement Gautier, a wheat analyst at Horizon Soft Commodities in Noisy le Grand, France. “That’s why the market is under pressure. There will certainly be strong competition among the various exporting countries.”
Wheat for July delivery traded at $6.835 a bushel in Chicago, headed for its second weekly drop. The grain has slumped 12 percent this year.
Ukraine plans to export 8 million to 9 million tons of wheat in the 2013-14 season, the country’s agriculture minister said yesterday. That would be up from 7 million tons in 2012-13, based on USDA estimates.
Australia this week forecast the 2013 wheat crop will rise to 25.4 million tons from 22.1 million tons collected in the previous season, lifting the outlook from 24.9 million tons in March after rains boosted soil moisture. Germany’s crop may gain 7.3 percent to 24 million tons, farm industry group Deutscher Raiffeisenverband e.V. forecast, 500,000 tons above a May estimate.
The wheat market is facing a “bearish” summer and autumn on increased supply from the Black Sea region and as importers including Morocco harvest a bigger domestic crop, Francois Luguenot, head of market analysis at French grain cooperative Union InVivo, said this week.
“Harvests are good in the exporting countries, and as some importers also have good potential, that suggests a possible decline in demand,” Gautier said. “Fundamentally, the trend is bearish.”
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