The global wheat output forecast is raised 5 million tonne from last month to 650 million tonne for season 2008-09. It is 46 million more than last season, according to the latest report released by the International Grains Council (IGC) on Friday.
Rains improved crop prospects in the EU, Russia, and Ukraine as well as in the US winter wheat areas. India’s production estimate has increased but drought threatens crops in parts of Near East Asia and North Africa, while Argentina and eastern Australia need more rain for planting, report said.
Projected consumption has been raised by 2 million tonne to 632 million tonne, 20 million more than last season.
Lower wheat prices should stimulate a recovery in food use in developing countries in Asia and Africa, and feed use will increase, especially in the EU and the US, because of tight supplies of other feeds, said in a report.
World carryover stocks are now projected to increase by 19 million tonne to 131 million tonne (3 million tonne more than last month’s forecast) with a strong recovery in the US and other major exporters.
The trade forecast has been reduced by one million tonne to 109 million tonne (still 4 million tonne higher than in 2007-08), a reduction in India’s import forecast more than offsetting increases in Pakistan, Iran, and Iraq.
Recovering export availabilities in competing countries, including Australia, Russia, and Ukraine could result in a sharp fall in US export shipments.
The past month saw further falls in world wheat prices and some weakening of rice export quotations as market concerns about supplies eased, but maize (corn) values remained volatile after setting new records in early May.
This, against a background of continued strength in global energy markets and further increases in ocean freight rates. Wheat export prices dipped by between $10 and $80 per tonne in response to the mostly favourable outlook for the next crop, with India’s successful harvest helping to temper food supply concerns, report said.
Since they last peaked in March, global wheat prices have declined by between 25% and 50%. A recent indicator of improved availabilities was Ukraine’s decision to remove its export quotas.
