November 12, 2007

High production forecast for global wheat

The US Department of Agriculture on Friday (November 9) raised its forecast for global wheat production to 603.3 million metric tonnes, a 2.83-million-ton increase from the USDA's October prediction of 600.47 million.

The USDA, in its November World Agricultural Supply and Demand Estimates report, attributed the increase to "higher output in Argentina, China and Ethiopia, which more than offsets reductions in Australia and Brazil."

The USDA said Argentina, Ethiopia and China will each produce 1 million more tonnes of wheat than previously expected.

China's wheat production will total 106 million tonnes, up from an October forecast of 105 million tonnes, the USDA predicted. The Argentine forecast is now for 15.5 million tonnes, up from 14.5 million.

"Australia production is cut (500,000) tonnes as crop prospects continue to decline with drought persisting in key southeastern growing areas," the USDA said in the report.

The USDA's forecast for US wheat product was unchanged this month at 2.067 billion bushels, but government forecasters did raise their prediction for US wheat ending stocks by 5 million bushels.

That came as a surprise to some analysts that were expecting a decrease because of the strong pace of US export sales.