(Updates price in sixth paragraph.)
Dec. 10 (Bloomberg) -- Australia reduced its wheat export forecast, even as farmers join producers from Canada to Russia in harvesting bigger crops, as lower stockpiles curb supplies in the world’s third-biggest shipper.
Exports may total 18.6 million metric tons in the year started July 1, from 19.2 million tons forecast in September and 21.3 million tons a year earlier, the Australian Bureau of Agricultural and Resource Economics and Sciences said in a report today. The price at U.S. Gulf ports of hard-red winter wheat, the most exported variety, may average $315 a ton in the year from $305 predicted in September and $348 in 2012-2013 on lower output of high-protein grain, Abares said.
Wheat in Chicago tumbled 17 percent this year as the bigger harvests push global production to a record, the U.S. Department of Agriculture estimates. Cereal costs tracked by the United Nations fell 24 percent in the past year, more than any food group, as corn slumped 40 percent and soybeans lost 9 percent on surging supply. World inventories of wheat and coarse grains such as corn are predicted to climb to a four-year high, the International Grains Council says.
“Although wheat production is forecast to increase, the supply of wheat available for export is expected to decline because of lower carry-over stocks from the 2012–2013 season,” Abares said, referring to the domestic crop. “The downward pressure on the world indicator price -- which is of high protein, milling grade wheat -- is expected to be cushioned to some extent” because of lower production of the variety, particularly in the U.S., it said.
Australia increased its harvest estimate last week to the third-largest ever because of a bigger crop in Western Australia. Production may reach 26.2 million tons from 24.5 million tons estimated in September and 22.5 million tons a year earlier, Abares said Dec. 3. The country’s stockpiles totaled about 1.6 million tons on Sept. 30 from 6.9 million tons a year earlier, Macquarie Group Ltd. said Nov. 21.
Wheat for March delivery fell 0.7 percent to $6.4575 a bushel on the Chicago Board of Trade at 7:51 p.m. in Singapore. The grain is the third-worst performer after corn and coffee among the eight commodities in the Standard & Poor’s Agriculture Index, which fell 19 percent this year.
Global wheat production will increase 7.8 percent to 706.4 million tons as output in Canada climbs 22 percent and Russia’s harvest surges 37 percent, according to the USDA. The agency is set to update its forecasts today. Abares estimates world output at 705 million tons.
Inventories of wheat and feed grains including corn will increase to 379 million tons at the end of 2013-2014, 12 percent more than this year, the London-based IGC said Nov. 28.
World corn production will increase 12 percent to 964 million tons as U.S. output climbs to a record 355 million tons, Abares said. The Gulf price of U.S. corn will average $220 a ton in the year started July 1 from $312 a year earlier, the bureau said. Soybean prices at Gulf ports will decline 15 percent to $510 a ton in 2013-2014 as global supply gains, it said.
Hard-red winter wheat, used to make bread, is the largest variety of wheat produced and exported by the U.S., the world’s biggest shipper, according to the USDA.
--Editors: Ovais Subhani, Jake Lloyd-Smith