June 13, 2006

US lowers wheat production forecast

The US Department of Agriculture (USDA) has once again lowered its 2006 and 2007 wheat forecast. Production estimates now total 48 million tonnes (1.8 billion bushels).

Last month's US wheat forecast was already down 11 percent from the previous marketing year. Persistently dry conditions have cut the 06/07 forecast by 14 percent and stocks by nearly 25 percent, USDA World Agriculture Outlook Board chairman Gerald Bange said, adding that higher wheat prices should result.

The price outlook is now USUS$3.90, which is up nearly 50 cents from the 2005-06 year and would be the highest since 1996.

Wheat at this price would lower US wheat exports by about 100 million bushels, to 900 million bushels, he said.

While Australian wheat futures market went up, the Chicago wheat market was down USUS$0.11 a bushel.