By Olivia Cooper
THE International Grains Council has increased its coarse grain production estimate by 4 million tonnes, due to larger maize and barley crops in the USA and former Soviet Union (FSU).
The November report pegged coarse grain production at 876m tonnes, 4m tonnes above last months forecast, and 10m tonnes up on last years crop.
Although this was widely expected, larger stocks in the FSU are negative for UK barley prices, as our exportable surplus will need to compete with cheap eastern European tonnage.
But the Home-Grown Cereals Authoritys Julian Bell says Baltic sea ports will be frozen until April, limiting any immediate effects of this increase.
The IGC also gave its first estimate of the 2002 harvest, now that winter wheat plantings are complete in most the northern Hemisphere.
The report predicted that, assuming normal growing and harvesting conditions, world wheat output in 2002 could be around 590m tonnes, 15m tonnes more than in 2001.
“Although it is very early days yet, this could halt the erosion of wheat stocks we have seen in the past four years, which would knock prices,” says Mr Bell.
But the US wheat crop is struggling, with the worst ratings since 1991.
About 20% is rated poor to very poor, and the hard red winter crop even worse hit, with about 40% in that section.
“There is a lot of potential for US prices to rise over the next four months,” says Mr Bell.
“Now is a good time for farmers to look at their marketing for next year.
“Purchasing an option could be a good way to lock into a minimum price while benefiting from any price rises later in the season.”