USDA forecasts fall in global wheat supply
Friday 13th August 2010
The outlook for world wheat production has been hit after the US Department of Agriculture (USDA) revised down its crop forecast for Russia, saying global production would be 15.3m tonnes lower at 645.7m tonnes.
The production outlook for Russia, which has seen its crops devastated by drought and extreme heat, was lowered by 15% to 45m tonnes. The USDA also cut its wheat production forecasts for Kazakhstan by 18%, which is suffering the same drought conditions as Russia. Ukraine had its forecast cut by 15%.
But the cuts in forecasts for Russia was offset by increases in production forecast in the US, India, Australia and Uzbekistan.
The cut to production forecasts was bigger than analysts had expected.
But world wheat stocks still remain above crisis levels seen in 2007-08 and the USDA said stocks would fall from just under 194m tonnes to 174.8m tonnes.
The USDA report also predicted that reduced supplies and higher prices would reduce global consumption of wheat.
Earlier this month, fears about production levels lifted wheat prices on the futures markets to their highest levels for two years.
But the USDA sought to play down concerns that wheat prices would continue to rise to levels last seen during the food price crisis three years ago.
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