Wheat supply down, Prices up?
Seattle--Global supplies of wheat, the world's second-most consumed grain, will be historically tight next year even after bumper harvests, U.S. Wheat Associates Inc. President Alan Tracy said.Growers worldwide are harvesting what will likely be the second-biggest crop on record this year, following the largest- ever last season, Tracy said in an interview in Tokyo. Still, world wheat consumption may rise as the economic slump prompts some consumers to switch from meat to cereals, he said.
Bloomberg News reports that wheat, corn and rice futures rose to records last year, increasing food costs and sparking riots from Haiti and to Ivory Coast. Wheat prices lost 36 percent in the past year as global output reached a record 687 million metric tons in 2008-09, according to International Grains Council estimates, raising year-end stockpiles for the first time in four years.
"The remaining stocks are still quite tight," Tracy said on June 19, forecasting the stocks-to-use ratio, the gauge of supply tightness, will be 23 to 24 percent at the end of 2009-10, compared with 19 percent in 2007-08.Wheat futures in Chicago fell 1.9 percent to $5.735 a bushel at 5:53 p.m. Tokyo time.
Prices rose to $6.77 a bushel on June 15, the highest since Oct. 2 on speculation rain may damage U.S. winter crop yields and delay spring planting. The prices are still down 6.1 percent this year compared with a 2.8 percent gain for corn and a 26 percent rally in soybeans.