Unfavorable weather cuts world wheat, coarse grains supplies

by Emily Buckley
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LONDON, U.K. — Heat and drought, particularly in Europe, as well as heavy rains in central and eastern Europe, have significantly reduced world wheat supplies and stocks estimates, according to the International Grains Council. The IGC at the end of August projected world wheat production for 2003-04 at 557 million tonnes, down 11 million from last month’s report and the lowest since 1995. (See related article on page 16.)

Principal reductions are in the E.U. — 4 million tonnes, with the biggest cut in Germany —

Central and Eastern Europe, Russia and Ukraine, the Council said. Canada’s forecast is down by 2.5 million tonnes to 21 million, but timely rains in eastern Australia boosted its estimate by 1 million tonnes to 22 million.

Reduced forecast export availabilities in the E.U. and Canada will be balanced by increases in the forecasts for the U.S., to 29 million tonnes, compared with 23 million last year, and Russia.

Stocks in the five major exporters at the end of 2003-04 are forecast at 35 million tonnes, the lowest since 1995-96. Stocks will be particularly small in Canada and the E.U., and wheat prices have been rising significantly in markets worldwide. With declines also in China and the CIS, world wheat stocks are expected to fall to 130 million tonnes.

In coarse grains, large reductions in the crop forecasts for Europe and the United States, particularly for maize, indicate a tighter supply/demand balance than previously expected, the Council said.

Forecast world production in 2003-04 is 902 million tonnes, 25 million less than last month’s prediction, but 29 million more than in 2002-03. Declines were noted in Ukraine, Canada and China. The forecast of world coarse grain carryover stocks at the end of 2003-04 is 132 million tonnes.

The IGC predicted stronger maize prices will limit the growth in ethanol in the U.S., while in Canada reduced cattle and hog numbers are likely to cut feed demand.