June 11, 2004

 

 

Russia, EU Wheat Crops Seen Recovering In 04; China's Down

 

Wheat crops in the E.U., Russia and Ukraine are expected to recover in 2004 from a poor showing in 2003, Canadian Wheat Board officials said at an industry briefing Thursday.

 

However, production likely will decrease in the U.S., China and Kazakhstan, said the CWB. Chinese production is expected to be the lowest in more than 20 years, the CWB said.

 

Chinese fall wheat seedings were delayed by rain, which caused poor germination, said Guy Ash, an analyst with the CWB's weather and crop- surveillance department. Ash said Chinese producers are switching to more profitable crops due to the minimal returns seen for wheat.

 

Urbanization also continues to claim more Chinese farmland each year, said Ash. While seeded area in China is at its lowest level in 40 years, timely rains through April and May have helped improve yields, said Ash.

 

Citing USDA data, he said, China wheat production was pegged at 84 to 85 million metric tons, well below the five-year average of 98 million tons.

 

While soil moisture conditions in the U.S. have improved in the past month, drought stress in the hard red wheat belt and freeze damage in the western and northern growing areas will likely mean reduced wheat yields, said David Przednowek, also with the CWB's weather and crop-surveillance department.

 

European wheat production could reach record highs in 2004, said Prezednowek, pointing to USDA data calling for E.U.-25 wheat production of 127.5 million metric tons. Planting conditions were favorable in the fall, and timely rains have helped the crop along, he said.

 

Mild winter temperatures resulted in minimal winter kill in the Russian and Ukranian wheat crops this year. As a result, harvested area will be considerably higher in 2004 than it was the previous year, said Ash. In Ukraine, wheat production was pegged at 15.0 million metric tons, which compares to only 4.0 million the previous year, said Ash.

 

Russian production was pegged at 42.0 million tons, which compares to 33.0 million last year. However, Kazakhstan likely will see a small decline in production due to extremely hot, dry conditions, said Ash.

 

North African, Italian and Spanish durum production is expected to be up in 2004, said Przednowek. However, May was much wetter than normal across both regions, which could lead to some quality concerns, he added.

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