Reduced Wheat Harvests in India and Australia May Alleviate Global Wheat Glut – USDA
The latest estimate for global wheat inventories is 237.6 million tons – down from a previous estimate of 238.9 million tons, according to the latest estimate report issued by the U.S. Department of Agriculture (USDA), reports the Chicago Tribune.
The wheat harvest in India, the world’s second largest producer after China, is forecast to be 86.53 million tons – down from a previous estimate of 88.94 million tons. In addition, Australia, the world’s fourth largest wheat exporter will harvest 24.5 million tons – down from a previous estimate of 26 million tons. The same report forecasts that U.S. production and inventories will remain steady.
As prices in Chicago fall for a third straight quarter amid an ongoing glut, and U.S. farmers contend with a strong dollar, the possibility of dry weather caused by El Niño is indicating that harvests this year could be smaller than originally expected.
Although these expectations represent an easing within the market, the world is still awash in grain. "We still have too much grain in the world, and the U.S. is the least competitive exporter," Don Roose, the president of U.S. Commodities Inc. In West Des Moines, Iowa, told the Chicago Tribune in a telephone interview.
In an unexpected move, the USDA also lowered its forecast for global corn and soybean inventories based on lower corn output in South Africa, revisions to Brazil’s inventory levels, and higher soybean use by China. Chinese buyers are expected to import 82 million tons of soybeans this year – up from a previous estimate of 80.5 million tons.