US and world wheat ending stocks are expected to increase in 2009/10, despite an assumed reduction in production, the US Department of Agriculture says.
This view contrasts to its projections for 09/10 coarse grain and cotton ending stocks which are expected to fall, the latest CBA Agri Insights reports.
An assumed rebound in global oilseed production in 09/10 will result in oilseed ending stocks increasing from 08/09 levels, but they will remain at tight levels according to the USDA in its June 2009 World Agricultural Supply and Demand Estimates (WASDE).
World wheat production in 09/10 will decline from the record harvest posted last year. The USDA now expects that production in this season will reach 656.1 million tonnes (mt), 26mt or 3.8pct below the 08/09 crop.
However, the 09/10 crop will still be the second largest crop in history.
The USDA’s latest estimate of 09/10 crop also represents a 1.6mt reduction from their prior estimate which was released in May. Wheat production estimates where revised lower for:
• European Union (-2.3mt) as result of lower yields in Hungary, Romania and Spain due to dryness.
• Canada (-1mt) due to dry conditions in Alberta and Saskatchewan and cold conditions that delayed spring wheat plantings.
• Ukraine (-1mt) due to dry conditions in April and May which cut yield potentials.
However, crop potentials for 09/10 were revised higher for Russia (+1mt, due to an expected larger area and improved spring wheat crop prospects) and China (+0.5mt, due to a larger area).
World wheat consumption estimates have been revised lower by nearly 1mt to 641mt, mainly due to reduced wheat feeding in Ukraine and the United States, and lower food use in Russia.
But despite the downward revision, consumption in 09/10 will be a new record at 8mt more than 08/09 levels and 25mt more than 07/08 levels.
Global wheat ending stocks for 09/10 were unexpectedly revised higher by 750kt to 182.7mt, the highest level for many years and well beyond the lows of 120mt in 07/08.
Higher carry-in stocks and lower consumption estimates were the primary factors contributing to the higher stock levels.
World wheat stock to use ratios are expected to climb to a comfortable 28.5pct in 09/10, which is up slightly from the prior estimate and significantly higher than actual the 19pct lows in 07/08.
A big increase in Russian stocks (+2.5mt), plus moderate increases in the United States and the "other countries" offsets lower ending stock estimates for the EU and Canada.
