March 25, 2011

 

Global wheat production will exceed past estimates

 

 

World wheat production next season will be higher than estimated a month ago, with output forecasted to rise 4% in the year through June 2012 to 673 million tonnes as farmers boost planting in response to higher prices, the International Grains council said.

 

This value is an increase from its February forecast, with a 3.7% gain.

 

Chicago wheat prices jumped 51% in the past year, boosted by Russia's ban on grain exports after a crop-wasting drought, and flooding in Canada, Germany, and Australia. The council's forecast is below the UN's forecast for wheat output of 676 million tonnes.

 

"World wheat supplies and demand are projected to be broadly balanced, with carryover stocks slightly increased," the IGC said of the coming season.

 

The surge in grains helped to lift world food prices to a record in February, according to an index tracked by the UN's Food and Agriculture Organization.

 

Rising food costs threaten democracies in poor countries and cause civil conflict, according to a study published by the International Monetary Fund. Higher prices of food contributed to riots across North Africa and the Middle East in the last few months that toppled leaders in Egypt and Tunisia.

 

Wheat sowing will rise 3% to 224 million hectares (554 million acres), the most since 1998, the IGC said last month.

 

Global corn stocks will decline for a third season in the year through June 2012 as record production will still fail to fulfill rising demand, causing availability of the grain "to remain tight," the council said in February.

 

World corn stocks are forecast to drop to a four-year low of 118 million tonnes when the current season ends this June because of increased demand from US ethanol makers, the IGC said.

 

Corn outpaced other grains on the CBOT in the past year, advancing 87%.

 

Based on first assumptions of corn planting for harvesting in the 2011-2012 season and "trend yields," the IGC last month had forecasted larger crops in "several key producers," including China and the US.

 

Global wheat output this season will be 649 million tonnes, up from 648 million tonnes forecast last month, the council said. The corn production estimate for 2010-2011 was lowered to 808 million tonnes from 811 million tonnes last month.