Wheat Market Review - 2010 World Wheat Situation More Balanced Break Date: 6/25/2010 8:26:36 AM Last Edit: 6/25/2010 8:26:36 AM
2010 World Wheat Situation Latest projections for the 2010 world wheat crop are pointing toward a better balance between production and usage. This is helping to temper the buildup in wheat supplies, leading to a slightly lower stocks-to-use ratio in the current year.
USDA's June supply and demand report projects world wheat production at 24.6 billion bushels, only slightly higher than projected use of 24.5 billion and future reports are likely to show even lower production. Adverse weather is threatening production in key countries. In Canada, an untimely period of cool, wet conditions may prevent upwards of 3 to 4 million acres of wheat from being planted. This has potential to reduce the world crop by another 120 to 150 million bushels. In addition, overly wet conditions in Eastern Europe combined with overly hot, dry conditions in parts of the Former Soviet Union, as well as China are hampering crop prospects.
Usage levels of 24.5 billion bushel would be a record and the third straight year of gains. Growth is expected in both feed and food demand. Feed use is projected to reach 4.5 billion bushels, up 3 percent or 130 million bushels from last year. The non-feed use is projected at 20 billion bushels, up 2 percent or 430 million bushels from last season.
The current stocks-to-use ratio is at 29 percent, down slightly from 30 percent last year. This is still well above the recent low of 20 percent reached in 2008, and world prices continue to reflect a well supplied situation from a buyer's perspective. However, further production cuts in the 2010 crop, combined with the projections for record demand should begin to build a more positive price picture.
For more information, contact us at ndwheat@ndwheat.com
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