FAO: Wheat and maize recovery to stabilize commodities

The Food and Agriculture Organization of the United Nations (FAO) said total world cereal production is forecast to increase by around 7% in 2013, compared to last year. The increase would bring world cereal production to 2.4bn tons – a new record level, it said.

Within this, wheat output for 2013 is set to reach record highs of 704m tons – an increase of 6.8%. This level “more than recoups the previous year’s reduction and represents the highest level in history,”​ the FAO said.

Coarse grains are also set to surge sharply by 9.7% from 2012 to high an output of 1.27bn tons.

European strength, US weakness​

“By far, the bulk of the increase this year is expected to originate in Europe, as overall prospects remain favorable in the EU and outputs in the major producing CIS countries are forecast to rebound sharply from drought-reduced levels in 2012,”​ it said.

The FAO added that outlook is also positive among major exporters Canada, Australia and Argentina, and most wheat producing and consuming countries.

“The main exception is the United States, where wheat crop growth has been hindered by adverse weather conditions – drought in particular – this season,”​ it said.

The latest official forecast for US wheat was around 41m tons – about 8% down on the previous year.

Wheat price dip​

Prices of wheat “declined slightly”​ in June with the onset of the 2013 harvests in the Northern Hemisphere, the FAO said.

The export price of Hard Red Winter wheat from US was 2% lower than the previous month, although still 12% higher than the previous year – June 2012.

Despite the drop in wheat, the price of bread and wheat flour in the EU remains elevated after the price surge during the second half of 2012, the FAO said.

Maize prices increased – up 2% from May levels. “This increase reflects a continued tight supply situation, which may persist until the arrival of new maize crops in October,”​ it said.