World wheat production is rebounding
World wheat stocks have been tight for some time and
decreased production around the globe last year made them even
But many have said a rebound in world wheat production was needed this year
and it looks like it is happening.
The Russian Agricultural Ministry has
reported that wheat harvest and exports were significantly higher at this time
than they were in 2007.
The Ukraine also reported excellent grain
harvests of 70% more than a year ago.
While Rabobank cut the estimate of
Australia's wheat harvest by a half million tonnes, their forecast of 20.5
million is still a significant increase over the past two year's harvests that
were hit by severe drought.
A report out of Europe shows a 25% increase
in forecasted wheat production over last year.
"What we are looking at
now is an increase of world wheat production to the tune of nearly 70 million
tonnes," says World Trade Outlook chairman Gerry Bange.
"That is a very,
very sharp increase; over 11pc increase in one year." The US wheat production
has also increased by 21pc over last year.
However, Bange says there is a
slight problem with this rebound. "The recovery is coming at a time where we are
having sort of an economic slowdown world wide," he said.
contributed to our decrease in commodity prices that we've seen of late. So it
depends really on which side of the fence you're on.
"If you are looking
at it from the perspective of less pressure on food prices it's good news; if
you are looking at it from the perspective of the farmer it's not such good
Bange says the board has cut US average wheat prices for next
season by 25 cents to $7 a bushel which is still more than a half dollar above
what growers received this past season. (Source: The
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