USDA raises world Wheat supply forecast by 800,000 tonnes

Despite a reduction in Australian production, world wheat supplies for 2018-19 have increased by 800,000 tonnes, according to the latest US Department of Agriculture (USDA) world supply report.

A bumper Canadian crop and additional Russian carry-over stocks have levelled out the gap in grain production as Australian production suffers the effects of drought. Canada’s wheat production is raised 300,000 tons to 31.8 million, based on the latest estimate by Statistics Canada.

Australia’s wheat exports were lowered by one million tonnes to 10.5 million tonnes, as export prices were expected to remain uncompetitive and domestic grain supplies likely to be consumed as feed, the report said. In comparison, Australian wheat exports in 2017-18 reached 14 million tonnes.

The report also scaled back total Australian grain production by 500,000 tonnes to 17 million tonnes for 2018-19.

Global ending stocks are raised by 1.4 million tonnes to 268.1 million tonnes, primarily on increases for the EU and the United States but are 4 per cent lower than last year’s record 279.9 million.

Projected global 2018/19 trade is lower, as reduced Australian, EU, and U.S. exports are partly offset by higher Russian exports, which have increased by 1.5 million tonnes to 36.5 million tonnes. Russia and other Black Sea suppliers continue to displace EU and U.S. exports in several markets in the first half of 2018/19 but are expected to be less competitive in the second half based on reduced exportable supplies.

Global coarse grain production for 2018/19 is forecast 0.3 million tonnes higher to 1,373.6 million. The 2018/19 foreign coarse grain outlook is for larger production, and virtually unchanged consumption and ending stocks relative to last month. Foreign corn ending stocks are higher than last month, mostly reflecting increases for the EU, Mexico, Vietnam, Ukraine, and Japan, that more than offset declines for Brazil, Canada, and South Africa, USDA report said.

Shekhar Ghosh is a communications consultant and and former journalist, who has edited and written for publications such as like Business India, Business Standard, Business Today and Outlook.

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