July 29, 2011
The International Grains Council (IGC) on Thursday (Jul 28) raised its forecast for global wheat production in 2011-12 with improving harvest prospects in the EU, Russia and the US.
The IGC put 2011-12 global wheat production at 674 million tonnes, up from a previous forecast of 666 million tonnes and well above the prior season's 651 million when the worst drought in decades devastated crops in Russia.
"Wheat yields prospects in particular improved in the past month with some key areas in the EU and Russia receiving beneficial rains," the IGC said in a monthly report.
Russia's wheat crop was seen at 56.0 million tonnes, up from a previous forecast of 54.0 million and far above the prior season's 41.5 million.
The crop is likely, however, to fall short of pre-drought levels with 61.7 million tonnes harvested in 2009-10 and an even higher 63.8 million in 2008-09.
Russia has quickly re-established itself in global export markets this month after an absence of almost one-year, dominating tenders for key buyers such as top importer Egypt.
The IGC raised its forecast for Russian wheat exports in 2011-12 to 13.0 million tonnes from 9.5 million and far above the prior season's 3.9 million.
The outlook for crops in the EU has also improved as rains revived crops parched by a spring drought in the west of the bloc. The IGC raised its forecast for the French wheat crop by 1.5 million tonnes to 35.5 million and the German crop by 1.0 million tonnes to 24.0 million.
Global wheat consumption in 2011-12 was also upwardly revised by six million tonnes to 676 million to reflect "the competitive cost for feed use relative to other grains."
The IGC put global corn production in 2011-12 at a record 859 million tonnes, up one million from last month's forecast and well above the prior season's 827 million.
Consumption of corn was, however, seen even stronger at 863 million tonnes, up from a previous forecast of 861 million and the prior season's 849 million.
The IGC said a firmer world economy is expected to underpin meat demand, especially in developing countries.
"Sold growth in feed use of corn is assumed in China, but in a number of countries this will depend on its price relationship with lower grade wheat," the IGC said.