Josh Sosland
No one with an eye on grain markets will be surprised that global production of major crops appears headed toward a record high in 2016-17, but the pace at which the bounty has expanded is truly breathtaking. In the four weeks ended July 28, the International Grains Council has raised its total grains forecast by another 20 million tonnes, to 2,046 million.

The wheat forecast, at 735 million tonnes, is up 6 million tonnes (220 million bus) for the month. The projection remains just shy of the record set in 2015-16, but the carryover forecast of 228 million tonnes would be the largest ever, up 4% from the year before. The I.G.C. said gains in the United States and the former Soviet Union account for most of the production increase over the past month.

Resultant low prices have provided welcome relief for U.S. grain-based foods companies striving for reasonable profit margins but have placed corresponding pressure on growers, who faced the toughest economic environment for crop production in years. As production prospects improved last week, wheat futures headed back toward contract lows. A complicating factor for all players is the quality of the 2016 crop. Remarkably low protein content in hard red winter creates challenges for growers looking to market their wheat and for bakers looking for as seamless a transition as possible in this highly unusual year.