U.S. Wheat Associates reported on June 20 that rain had raised quality concerns for the SRW crop and threatened to prevent the final spring plantings in the Northern Plains, supporting futures.

“Gains were limited by ample world supply and relatively weak export demand for U.S. wheat,” it said.

In a separate report on the harvest issued on the same date, U.S. Wheat said that 2014 HRW wheat harvest has progressed into the southern half of Kansas.

“Harvest progress in Kansas continues to be significantly slowed not only by continuous rain showers, but also because many fields are saturated with water,” it said. “Mud is becoming a major issue.”

It reported slow progress in the soft red winter producing region. “However, rains continue to plague the entire region, leaving many fields too wet to harvest,” it said.

In its Wheat Outlook for June, the USDA’s Economic Research Service pointed out how it is changing the position of the U.S. on the world market.

“Projected last month to yield its primacy as the top wheat exporter to the European Union for the first time in history, the United States fell even further behind this month,” it said. “The wheat export forecast for the United States is lowered, as world wheat demand is shifting from U.S. wheat to that offered by U.S. competitors.”

One of the biggest producing areas of the United States is struggling. “Drought conditions continue to be a problem in the Central and Southern Plains,” it said. The USDA now projects U.S. wheat production at 52.85 million tonnes in 2014-15, down from 53.43 million projected a month earlier and last year’s estimate of 57.96 million tonnes.

USDA put global wheat production in 2014-15 at 701.6 million tonnes, a rise of 4.6 million in its projection since the previous month’s figures. World production in 2013-14 is estimated at 713.97 million tonnes. The USDA has added 5.2 million tonnes to its projection for the wheat crop outside the E.U., bringing it to 648.8 million tonnes.

“Two major exporting countries, the European Union and Russia, have increased production prospects,” it said. “Both Indian and Chinese wheat outputs are also expected to be higher.”

The largest increase for 2014-15 wheat production in the report is for India, up 1.9 million tonnes to 95.9 million, which takes the crop to a record-high level.

“The government of India issued a new crop production estimate based on a state-level yield survey,” it said. “Wheat harvesting is virtually over in the main wheat-producing states of Punjab, Haryana, and western Uttar Pradesh, while the rest of the states are quickly progressing.”

The projection for E.U. wheat production is raised by 1.4 million tonnes to 146.3 million, “with a tiny reduction of area (that is currently among the highest on record) and higher yield.”

“This month’s yield prospects were increased for some countries of northern and eastern Europe — France, Germany, Poland, Romania, and Bulgaria — as crop conditions improved from a month ago,” it said. “Though June is normally the month when the precipitation level is most important for European wheat development, this year much warmer than normal spring weather accelerated crop development by about two weeks. Consequently, in mid-May the wheat crop entered its flowering stage, making May rainfall crucial for wheat development. This May virtually all wheat areas from west to east in northern and central Europe received plentiful rainfall.”

These production increases more than offset reductions for Spain and Croatia, it said. Spain was hurt by dry weather, while there were floods in the Balkans.

The report also noted mostly favorable conditions for growing wheat in China.

“The wheat is heavily irrigated in China,” it said. “The combination of this year’s adequate irrigation resources, timely spring rains, and warm and dry harvest weather are expected to increase yields and boost production by 1 million tonnes to 124 million.”

This year’s wheat crop in China is expected to be a record, slightly exceeding the previous record of 1997-98 when wheat area was almost 25% higher, it said.

“Wheat production in China has been steadily increasing every year since 2004-05, and wheat yields have been reaching new records each of the last four years (since 2011-12),” the report said.

Increased yield prospects meant the USDA added 1 million tonnes to its forecast for 2014-15 wheat production in Russia, bringing it to 53 million.

“Russia’s 2014-15 wheat crop has had the advantage of mostly favorable growing conditions, including good rainfall in May that, much like the E.U., has benefited the crop that reached the crucial flowering and filling stages early,” it said.

Chris Lyddon is World Grain’s European editor. He may be contacted at: [email protected].