Global wheat supply forecast slashed

Wheat prices have climbed sharply as the latest official US
predictions ‎of global output undercut previous predictions.


Source: Press TV
http://www.presstv.ir/detail.aspx?id=138497§ionid=3510213


The US Department of Agriculture (USDA) has sharply slashed its forecast for 2010-11 world wheat production after revising its crop outlook for Russia.

On Thursday, the USDA cut its forecast for global wheat output by 2.3% to 645.73 million tons. That is below recent estimates from the Food and Agriculture Organization (FAO), which saw the crop at 651 million tons, the Wall Street Journal reported.

Estimations for wheat production have been cut repeatedly since the middle of the summer, when the severity of record-setting heat and drought in the former Soviet Union became apparent.

"The Russian drought has changed the landscape of agriculture for the next 18 months at least," said Dan Basse, president of AgResource Company, an agricultural research firm. "There will be plenty of volatility in the months to come."

Russian Prime Minister Vladimir Putin had already warned that this year's grain harvest would be worse than previously thought.

Record drought in Russia has prompted the country's prime minister to place a temporary ban on grain exports until the end of the year.

"In connection with the unusually high temperatures and the drought, I consider it right to impose a temporary ban on the export from Russia of grain and other products produced from grain," Putin told a government meeting on Thursday.

The announcement has sent wheat prices soaring on US exchanges and caused double-digit gains in Europe.

Meanwhile, FAO has cut its global wheat production forecast for 2010 due to the impact of unfavorable weather on crops in recent weeks.

The global wheat production forecast is now expected to be 651 million tons, down from the 676 million tons anticipated in June, the Rome-based agency said in a statement.

However, the FAO pointed out that global inventories are sufficient, thanks to two consecutive years of record crops, to cover the anticipated production shortfall.

"Despite production problems in some leading exporting countries, the world wheat market remains far more balanced than at the time of the world food crisis in 2007/2008 and fears of a new global food crisis are not justified at this point," it stated.