World wheat forecast up despite El Niño
28 August 1997
World wheat forecast up despite El Niño
By Boyd Champness
BUMPER US crops have pushed world wheat production forecasts above last years levels, despite many countries being gripped by drought caused by the El Niño effect.
World production is forecast to hit 586 million tonnes, a further 1mt more than last months forecast, compared to 581mt in 1996-97, according to the International Grains Council monthly report, released today.
The report says that increased production in China, India, Russia and particularly the US, will offset reductions for the EC, Central/Eastern Europe, Canada, Argentina and Australia.
However, the quality of this years world harvest is expected to be poorer, resulting in an increase in feed wheat supplies. This is likely to have an impact on other feed grains such as maize and barley, depending on how feed wheat is priced against these two cereals.
“Availabilities of feed wheat will be higher in Russia. There are rumours that some could enter the global market, but most will likely be absorbed domestically by private livestock rearing enterprises or sold to other former Soviet states,” the report says.
World wheat stocks are forecast to rise by 4mt to 103mt, with most of the increase coming from the US. World consumption is expected rise slightly to 582mt, compared to 578mt in 1996-97.
The outlook for coarse grains is not quite so rosy. Sharp decreases in estimated harvests of maize in China and the US are the main reasons why world production is expected to fall by 21mt to 875mt. Global output of barley and sorghum will also be down from last year, but oats and rye should change little.
World consumption for coarse grains is only expected to decline by 4mt to 892mt, despite the substantial slump predicted for world production. Smaller crops, particularly in the US and China, are tipped to have a greater impact on carryover stocks. Accordingly, world stocks are forecast to drop to 102mt compared with 119mt in 1996-97.
This years success story looks like being the US soya-bean crop, with production promising to grow beyond the previous record of 2.744 billion bushels (74.68mt). The US grain belt has enjoyed warm weather in recent weeks, further improving the crops prospects.
US soya-bean farmers are tipped to receive good money for their crops this season following the impact of El Niño on oil crops in the southern hemisphere – particularly oilseed crops in Australia and India and palm oil crops in the Far East.
Analysts at the Chicago Board of Trade predict that soya-oil futures will reach 28¢/lb in September and could go even higher next year. December soya-oil closed at 23.13¢ on Wednesday.