By FWi staff

WORLD wheat stocks will fall by 16 million tonnes next season, according to the first US Department of Agriculture forecast for 2000/1.

An increase in world prices and a 3% reduction in the size of the US wheat crop are also expected.

“USDA forecasts US farm prices at $92/t this season, with a possibility of reaching $107/t next season,” says Gerald Mason of HGCA.

“It is very much a supply and demand situation.

“With a tighter world market forecast, wheat stocks will be reduced and prices become more sensitive to production outlook for all grains.

“The UK crop is currently trading very close to world prices. Any improvement in world values could filter through to the EU and UK market,” he adds.

The 3% reduction on the crop size will have little effect on the wheat market, with the harvest already well under way, claims Glencore Grain.

“Some traders may be inclined to ignore this report in favour of continued reports of possible drought and low soil moisture conditions while maize planting continues across the USA.”