Global wheat output may fall on high stocks in 2010

After two successive years of record-high production, global wheat output may fall significantly in 2010 as growers shift to other crops, but ample stocks from previous years are expected to ensure adequate supply.

There are large carryover stocks of wheat that are sufficient to meet demand despite a fall in production, said Abdolreza Abbassian, Rome-based secretary of the Intergovernmental Group for Grains under the FAO.

According to FAO estimates, global wheat stocks are projected at 183.5 million tonnes by June 2010, up 28% from two years ago.

In reaction to high prices, there had been a large increase in plantings in 2008. Global wheat output is estimated at 678.6 million tonnes in 2009, up from 625.5 million tonnes in 2007.

However, Abbassian said high stockpiles and a fall in prices are prompting growers in countries such as the US to shift to other crops such as corn and soy.

"It's too early to give an output forecast, but global wheat production is expected to be lower in 2010," he said.

Last week, the USDA forecast a 12% drop on year in the country's wheat production to 1.945 billion bushels and a 9% drop in acreage to 53.8 million acres.

According to analysts, Black Sea producers are also likely to produce less wheat this year as they are saddled with large inventories.

Abbassian said assuming normal weather, the fall in wheat production may not have any significant impact on supplies, but concerns remain as rainfall and temperature systems have been erratic in recent years.