July 14, 2010

 

Global wheat production seen lower amid unfavourable weather

The global wheat crop in the new 2010/11 season is likely to fall to 656.37 million tonnes from 674.92 million tonnes in 2009/10 due to unfavourable weather in Europe, Canada and the Black Sea, according to German commodity analyst F.O. Licht.

 

In June, Licht had estimated the 2010/11 world wheat crop at 658.74 million tonnes.

 
The EU's 2010/11 wheat crop forecast has been cut to 139.37 million tonnes from the previous estimate in June of 141.74 million tonnes and down from the 139.39 harvested in 2009/10.

 

Canada's crop is likely to fall to 20.0 million tonnes from 26.50 million tonnes in 2009/10, Russia's to 56.0 million tonnes from 61.7 million tonnes, Ukraine's to 18.50 million tonnes from 20.8 million tonnes and Kazakhstan's to 14.5 million tonnes from 16.0 million tonnes.

 

The world 2010/11 corn crop is seen rising to 804.20 million tonnes from 784.05 million tonnes while the barley crop is expected to fall to 137.59 million tonnes from 149.48 million tonnes.

 

"The reversal of fortune for many of the crops has led to a jump in grain prices around the globe," Licht said. "The market will continue to watch weather and if conditions remain less than ideal the weather premium will continue to rise. The fundamental position of corn looks more bullish due to lower stocks in the US and less area planted there."

 

"The situation with wheat however continues to be moderated by the large stocks from previous seasons, which will mean further stiff competition in export markets in the new season," he added.