An International Grains Council’s Market Report, released on 27 April, says that world wheat stocks "are expected to remain tight.
"In view of the substantial rise in production needed to prevent a further decline in stocks, wheat markets responded nervously to potential threats from adverse weather, notably the early April frost in some key US winter wheat areas, dryness in parts of Europe and the CIS, and the urgent need for pre-planting rains in eastern Australia," the report says.
The Council has forecast the world crop of wheat in 2007-08 will be 623 million tonnes, compared with 590 million in the prior year and 620 million in 2005-06. Global wheat consump-tion in 2007-08 is expected to rise by 13 million tonnes over 2006-07 to reach 622 million, it says.
Northern hemisphere weather problems, including a severe frost in US winter wheat areas and very dry conditions in most of Europe, parts of North Africa and in China, have not yet significantly affected forecast total production, accord-ing to the report.
Production is now projected at 623 million tonnes, 1 million less than last month’s forecast, but 32 million tonnes more than in 2006.
The Grains Council particularly noted that: "US stocks will not likely recover in view of the further expansion in ethanol use of some 25 million tonnes."
There is also going to be significant growth in industrial use as "new plants to produce ethanol from wheat are opened in the EU and Canada", it predicts.
The International Grains Council adds exporters’ stocks, in partic-ular, are expected to remain tight.