• UN FAO releases first wheat-production forecast for 2016
  • Farmers reduced planting in Ukraine, Russia because of dryness

The bumper global grain glut may get a little bit smaller this year after dry weather curbed wheat planting in the Black Sea region.

World wheat production may fall 1.4 percent from last year’s record to 723 million metric tons, the United Nations’ Food & Agriculture Organization said in a report Thursday. It was their first forecast for the 2016 harvest.

Wheat prices are near a five-year low as large harvests around the world are set to boost grain stockpiles to the highest in three decades. The FAO expects wheat production to drop in the next season because farmers in Ukraine and Russia, two of the top exporting countries, reduced planting of winter crops because of dry weather.

“There may be a drop in the Black Sea area, and particularly in Ukraine,” Abdolreza Abbassian, a senior economist at the FAO in Rome, said by phone. Still, the decline “is not that big of a drop, when you have such big stocks. Large supplies remain out there."

Wheat production in the past season totaled 733 million tons, lower than last month’s estimate of 736.8 million tons, the FAO said. The agency cited reduced prospects for Indian and Iranian crops for the revision. Total grain production in 2015 was pegged at 2.525 billion tons, 0.2 percent less than estimated in February.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE