Agricultural analyst firm, Agribusiness Intelligence, is predicting global production of wheat will be down 33 million tonnes to 726 million tonnes year on year in 2018.
Wheat futures hit multi-year highs in recent months as adverse weather curtailed production in key exporting countries, leading to expectations of the first drop in world production in five years, and the first consecutive contraction of global wheat stocks after five years of growth.
The firm pegged global wheat production at 726 million tonnes for 2018/19, down 33 million tonnes from last year as producers grappled with dry conditions in the EU, Australia and western Russia, and wet and cold conditions in the East of Russia.
Globally the weather has had a disruptive effect on the crops in several locations around the world.
Winter wheat planting in Europe fell on adverse weather during the sowing window bringing expected production below recent years as the harvested area fell.
Dry and warm conditions in central Europe encouraged early plant growth, but a lack of subsequent rain brought growing moisture concerns as the campaign progressed.
With lower production, the price of wheat is buoyant, with four-year highs for the price of wheat in Paris reported at the beginning of August.
In England, early indicators from harvesting in the southeast suggest the UK crop could be down 1.3 million tonnes from last year at 13.5 million tonnes.
Farmers in the northern regions of Germany have been particularly affected by prolonged dry conditions and the hottest July on record leading to failure in some winter crops.
Whereas Germany usually produces some of Europe’s best quality wheat, this year the country’s farmers’ association cut its forecast of German wheat production to 18 million tonnes, falling over 6 million tonnes.
Gary Howard, senior analyst, grains and oilseeds at Informa’s Agribusiness Intelligence said: “After five-year period of surplus, the world looks to be heading for its second consecutive year of deficit in grains production. Despite expectations of slower demand growth this season than we’ve seen in recent years, weather issues in key exporters have narrowed supply.”