November 20, 2008

World wheat production in 2009-10 is expected to drop about 5 percent as weaker prices prompt farmers to seed less of the golden grain, agricultural research firm AgResource Company said Wednesday (November 19).

Global production is estimated at 647 million tonnes, down about 35 million tonnes from 2008-09, said Greg Wagner, senior commodity analyst for the Chicago-based firm. The US Department of Agriculture last week pegged 2008-09 global production at 682.37 million tonnes.

Wheat production in the European Union in 2009-10 is expected to decline about 8 million tonnes to 142 million tonnes, according to AgResource. Russian production should fall about 4 million to 5 million tonnes from the 2008-09 crop of 63 million, Wagner said. In the US, 2009-10 all-wheat production is seen at 2.3 billion bushels, down from 2.5 billion in 2008-09, Wagner said.

World wheat prices have tumbled since hitting highs earlier this year on global crop failures. Benchmark Chicago Board of Trade December wheat on Wednesday traded around US$5.30 per bushel after the nearby contract surged to US$13 in February.

Producers responded to the crop failures by expanding plantings for the 2008-09 crop year. Weather has been mostly favourable this year, and 2008-09 world production is expected to set a record.