World wheat heads for record low

By FWi staff

WORLD wheat stocks could be falling towards record lows, claims Banks Agriculture in its recent market report.

The latest US Department of Agriculture crop report confirms lower US winter wheat plantings for harvest 2001, at 16.7m ha (41.3m acres), the lowest US area since 1971.

Hard red winter wheat was estimated 5% lower and soft red winter 6% lower.

This, combined with increasing world demand for wheat means that demand is now forecast at 17.5m tonnes above world wheat supply, with world wheat stocks at only 109m tonnes, reports the HGCA.

“Production has been below consumption for the past three years, leading to falling stock levels” says the HGCAs Gerald Mason.

“But even so we are not yet at a critical stage because world stocks have been very large, at about 140m tonnes, following the two big harvests in 96 and 97.”

However, what happens next season is critical, says Mr Mason.

“There is the potential for the market to become uncomfortable.

“If recent planting data from the USDA and estimates of EU planted area come to fruition, there is the potential for low stock levels.”

But Mr Mason adds that when stocks are falling, there will become a point when the price increases. “This is to ration demand from wheat to another grain such as maize.”