Global wheat glut could pressure prices
U.S. wheat growers have reportedly planted the most winter wheat in three years just as the global wheat supply has swelled to the biggest in a decade.
“About 41.02 million acres, an area bigger than Illinois, were sown from September to November, 0.9 percent more than a year earlier,” according to the average of 16 analyst estimates compiled by Bloomberg. “That will add to world inventories set to rise 4 percent to 207.7 million metric tons, the most since 2000, the survey showed. Winter wheat makes up 74 percent of the U.S. crop, and the government gives its first estimate tomorrow,” Bloomberg reported.
World wheat production in 2011/2012 is projected up 2.5 million tons this month to 691.5 million, up 1 percent from the previous record in 2009/2010, according to the Wheat Outlook released from the USDA’s Economic Research Service this week.
Spurring global wheat production has been Russia, which saw a 35 percent increase in wheat in 2011 compared to 2010. In addition, Ukraine increased its output by 31 percent as Canada increased its supply by 9 percent and Australia by 1.5 percent to a record. India harvested its biggest crop ever as well.
In anticipation of the spring season, the crop condition in most of the Midwest wheat growing states is better than last year. Nearly all Central and Southern Plains states are reporting higher percentages for the good to excellent rating compared to this time last year.
Wheat production is projected to be up in several countries of the Former Soviet Union as well as Brazil. Russia is projected up 0.2 million to 56.2 million for its preliminary crop production data. It is also up 0.8 million tons in Brazil.