I.G.C. raises world wheat ending stocks forecast

by Jay Sjerven
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LONDON — The International Grains Council on Sept. 22 raised its forecast for 2011-12 world wheat ending stocks to 193 million tonnes, up 2 million tonnes from its August projection, equal to 2010-11 ending stocks and just 3 million tonnes shy of the 2010-11 carryout at 197 million tonnes. The I.G.C. has raised its world ending stocks estimate for the current year each month since June with steadily increasing world wheat production forecasts the principal reason for the upward adjustments.

The I.G.C. projected world wheat production in the current year at 679 million tonnes, up 2 million tonnes from its August forecast, up 4% from 651 million tonnes in the preceding year and equal to the 2009-10 outturn. The increase in the forecast from August was attributed to upward revisions in production projections for Russia, Ukraine and Australia. Russian wheat production was estimated at 58 million tonnes, up 1 million tonnes from the August forecast and up 40% from the drought-reduced outturn last year at 41.5 million tonnes. Ukraine production was raised to 21.5 million tonnes, up 0.5 million tonnes from the August forecast and up 30% from 16.8 million tonnes a year ago.

Australian wheat production was projected at 25.5 million tonnes, up 1 million tonnes from the August forecast but down 3% from the record outturn of 26.3 million tonnes in 2010-11.

The I.G.C. lowered its forecast for U.S. wheat production this year to 55 million tonnes compared with 56.5 million tonnes as its August projection. The I.G.C. said, “Spring wheat yields were reported to be disappointing in the United States, resulting in a reduced crop estimate, but a good outturn in Canada is helping to ease some concerns about tightening global supplies of premium milling wheats.”

The I.G.C. projected world wheat consumption in 2011-12 at a record 679 million tonnes, up 1 million tonnes from the August forecast and up 4% from the current record world usage of 656 million tonnes in 2010-11. Food use of wheat was projected at 461.9 million tonnes, up 1% from 456.6 million tonnes in 2010-11 because of higher forecast use in Asia and Africa.

Feed use of wheat was forecast at 126.9 million tonnes, up 12% from 113.7 million tonnes in the preceding year. Feed use in the current year would be the highest since the early 1990s.

“Competitive prices relative to maize continue to promote the use of wheat in livestock feeds,” the I.G.C. said.
This was particularly the case in the European Union, the former Soviet Union and China. Industrial use of wheat in 2011-12 was projected at 21 million tonnes, down 0.4 million tonnes from the August forecast but up 11% from 18.9 million tonnes in 2010-11. The reduction from August was attributed to delays in the construction of a new ethanol plant in the United Kingdom. The plant now was expected to commence production in early 2012 and will use around 1 million tonnes of wheat annually.

The I.G.C. forecast world trade in wheat in 2011-12 at 128 million tonnes, unchanged from August, up 1 million tonnes from 2010-11 and compared with the record 137 million tonnes in 2008-09.

“Global trade in milling wheat is projected to remain broadly stable, but attractive import costs relative to maize are expected to lift trade in feed wheat,” the I.G.C. said. “While concerns about global availabilities of higher-quality wheat have eased in the past month, some regional shortfalls are still anticipated. Spring wheat quality results in the United States appear to be better than expected, but the overall fall in crop size will lead to tight domestic supplies of premium-grade wheats, and this is expected to lift imports from Canada.”

Turning to Russia, the I.G.C. commented, “While exports by Russia are reported to be progressing at a record pace, despite logistical issues at some port installations, the (Russian) projection is raised by only 0.5 million tonnes compared with last month, to 16 million tonnes, below the recent peak of 18.8 million tonnes in 2009-10. Shipments in the second half of the marketing year are likely to be contained by tightening supplies and rising prices relative to other origins.”

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