UPDATE 1-Australia sees fourth-biggest wheat crop in 2013/14

Tue Jun 11, 2013 9:41pm EDT

* Australian wheat production seen up 15 pct on year ago

* Increased output to further pressure prices - analysts

* Canola production set to rise despite dry weather (Recasts lead, adds analyst quotes, details)

By Colin Packham

SYDNEY, June 12 (Reuters) - Australia, the world's second-biggest wheat exporter, is expected to boost wheat production by 15 percent this year to its fourth-largest crop on record, with a bumper harvest set to put further downward pressure on prices.

Wheat production for the new marketing year was expected at 25.4 million tonnes, up 2 percent from a March forecast and well above last year's 22.1 million tonnes, the Australian Bureau of Agriculture and Resource Economics and Sciences (ABARES) said on Wednesday.

Other wheat producing nations have forecast big crops, particularly in the Black Sea region, and higher Australian output could put more pressure on Chicago Board of Trade wheat futures, which have already fallen more than 10 percent this year on expectations for a bumper global crop.

"We are not surprised by ABARES robust estimate. Seasonal conditions have improved remarkably since the second half of May," said Luke Mathews, commodities strategist at the Commonwealth Bank of Australia.

"The U.S. Department of Agriculture will issue its latest supply and demand report tonight, and that is likely to point to very large supplies in the year ahead," he added.

ABARES made no mention of the recent discovery of genetically modified wheat (GMO) in the United States, which has turned some buyers away from U.S. wheat, although market concerns have eased in recent days.

Japan, which had halted all imports of U.S. feed wheat, said on Tuesday it was looking to buy 120,000 tonnes of U.S. product, alhtough it excluded wheat from Oregon where the GMO wheat was found.

Australia's commodities forecaster said acreage devoted to wheat would rise 3 percent in 2013/14 from the previous year as dry weather across much of Australia's east coast prevented farmers from planting canola before the sowing window closed.

Australia's overall wheat output will be buoyed by strong production from Western Australia, the country's largest grain producing state, ABARES said.

Production in Western Australia was forecast to rise 29 percent to 8.8 million tonnes, as the state recovers from dry conditions that checked yields in the previous season.

ABARES still raised its production forecast for 2013/14 canola to 3.230 million tonnes, up nearly 10 percent from its March estimate, even though dry weather at planting time prevented farmers from completing intended acreage.

It also raised its estimate for cotton, pegging cotton production during the 2013/14 season at 995,000 tonnes, up from estimated production of 905,000 tonnes in March.

(Editing by Richard Pullin)