(MarketWatch) – The U.S. Department of Agriculture said global wheat production may reach a new record in the coming year, replenishing tight supplies and raising the chances for further price falls.
“If not a record crop, then certainly we can expect a return to the levels we have seen in recent years,” said Department of Agriculture Chief Economist Joseph Glauber in an interview with Dow Jones Newswires late Wednesday.
Benchmark prices for wheat fell to an eight-month low at the Chicago Board of Trade this week as snowstorms in the U.S. spurred hopes of a recovery for drought-affected crops. Mr. Glauber said the recent snow is providing much-needed water to farms, though conditions are changing “week to week”. Crop yields in the Black Sea region of Russia and the Ukraine are also expected to return to trend after drought cut production by about a third last year, he said.
Wheat prices surged last year as crops were damaged by droughts in the U.S., Russia and Australia, major producers of the grain. Global supplies are expected to fall 6% in the 12 months ending Sep. 30 from a year earlier to 653.6 million tons, according to the USDA’s most recent estimates.
The USDA is due to update its global wheat, soybean and corn stock forecasts for the current season on Friday. The previous record for a wheat crop was 696.6 million tons, set in the 2011-12 season.
Australia’s government forecaster this week estimated the nation’s wheat production will grow by 13% on-year to 25 million metric tons in the season through October, helped by higher plantings and better yields in top producing state Western Australia. Australia is the world’s second-largest wheat exporter, after the U.S.
