WORLD wheat production continues to reach new highs with projections for the global crop rising again this month, despite reports the European Union crop will be below previous estimates.

According to the latest United States Department of Agriculture (USDA) wheat outlook report for August, global wheat production is now predicted to hit 743.4 million metric tonnes in 2016/17.

This is up from 734.8mmt in 2015/16 and 727.9mmt in 2014/15.

The larger than expected output is likely to put further downward pressure on prices and encourages additional demand in Asia and North Africa, raising world wheat trade prospects.

The world’s major wheat-exporting countries – the United States, Australia, Canada, Kazakhstan, Russia and Ukraine – have been buoyed by favourable weather conditions and the potential to register record harvests.

Russia tops export list

Russia is set to become the world’s top exporter for the first time with wheat production for 2016/17 estimated to be a record 72mmt, despite its wheat area being much lower than it was at its historical high in the 1960s and 1970s.

The latest estimate for Russian production is up 7mmt from last month and up 11mmt from last year. It surpasses the previous record of 63.7mmt harvested in 2008.

The increase is based on record winter wheat yields in western Russia, and the potential for high yields in spring wheat in the Volga, Siberian, and Ural Districts.

Ukraine wheat production for 2016/17 is forecast to be 27mmt, compared to 25mmt last month and 27.3mmt for 2015/16.

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In the United States, estimated production has risen from 51.5mmt last month to 53.2mmt on rising production for all classes of wheat.

While overall production in the US is not at record levels, yields are at or near record levels for several classes of wheat.

As the winter wheat harvest nears completion in the US and the spring wheat harvest moves into full swing, production forecasts for both crops continue to improve.

Nearby in Canada, production is estimated at 30mmt, up 8.7 per cent from 2015/16 despite a decrease in area. The area harvested is estimated to be 9.3 million hectares, down 3.1pc from 2015/16.

Australia set for 26.5mmt

While estimates for Australian wheat production vary among Australian forecasters, the USDA estimates Australian output for 2016/17 will be 26.5mmt, up 1mmt from last month and up 2mmt from last season.

The harvested area is forecast to be 12.8 million hectares, unchanged from last month and unchanged from last year.

EU hardest hit

The only significant world region showing a drop in wheat production is the European Union (EU) where the USDA estimates 2016/17 production will be 147.5mmt, 9mmt tons below last month and 12.5mmt below the 2015/16 record.

The USDA estimate for EU wheat production has decreased substantially since last month due to constant rain and a lack of sunshine during flowering. It is now at the lowest level in three years.

The biggest fall is in France – the EU’s largest producer – where the estimated output of 31.5mmt is down 8.5mmt from last month and is the lowest since 2003.