August 15, 2006

Global wheat output down by 20 million tonnes

Global wheat output for 2006-07 is forecast at 598 million tonnes, some 20 million tonnes lower than the previous year.

While consumption (615.3 million tonnes) is 9 million tonnes lower than the previous year, it is still expected to exceed production. Ending stocks are also expected to be sharply down to 128.4 million tonnes.

Hot and dry weather reduced production for major exporters EU-25, Canada and Argentina, while favourable weather increased production for Russia and Ukraine, the USDA said.

Consumption is expected to be lower for EU-25, Russia and Ukraine as higher wheat prices prompt farmers to choose barley over wheat, the agency said.

Forecast of world output for coarse grains, at 969.9 million tonnes, is down 4 million tonnes from the previous year.

Consumption would exceed production during the year while global grain ending stocks are expected to be down slightly, the USDA said.

For the US, a bigger than expected corn yield, the country's second largest, is expected, contrary to predictions that recent drought conditions would have hurt yields.