World Wheat Supply Expected To Stay Ample As Output Dips
12:50 PM, julio 20, 2009
By Tom Polansek
Of DOW JONES NEWSWIRES
CHICAGO (Dow Jones)--The world won't produce as much wheat this year as
expected, but supplies will still be more than enough to meet demand and
pressure prices, analysts said.
The U.S. Department of Agriculture, in its July supply and demand report,
raised its 2009-10 production forecast 420,000 tons from last month to 656.48
million bushels. Higher output by the U.S. and FSU-12 countries more than
offset reduced estimates for Argentina, Canada and the European Union.
But estimates for Argentina, Russia and possibly Australia are poised to fall
in the coming months as farmers grapple with weather problems, analysts said.
The countries are important exporters on the world market.
"I think the trend in global production estimates is going to start turning
downward," said Dan Manternach, ag services director for Doane Advisory
Services. "I think the fundamentals are leaning toward tighter global ending
stocks."
The USDA, in the supply and demand report, cut its estimate for 2009-10 world
wheat ending stocks by 1.37 million tons from last month to 181.28 million. The
decline ended a series of increases in ending stocks estimates.
Still, the world is nowhere near having a shortage of wheat. Supplies are
considered tight if ending stocks amount to less than a 90-day supply, and the
world has "well over" 100 days of supply, Manternach said.
"There are still plenty of stocks out there to keep prices at a depressed
level," Citigroup analyst Terry Reilly said.
Citigroup estimated world production at 651 million tons, while AgResource
Company estimated production at 640.5 million to 644.5 million. Activity in
U.S. wheat futures will "be based in supply through the summer, namely figuring
out production in chief exporting countries," AgResource said in a note.
Citigroup pegged Argentina's crop at 7.3 million tons, down 2.2 million from
USDA's July estimate. Dryness, low prices and high financing costs have
discouraged producers from planting wheat.
The Buenos Aires Cereals exchange this week trimmed its forecast for 2009-10
wheat area to 2.75 million hectares, a drop of 40.2% on the year and the
smallest area going to wheat in more than 100 years. A wheat area of that size
would eliminate Argentina as a wheat exporter and likely trigger imports of
500,000 tons to 1 million tons, likely from the U.S., according to AgResource.
"On the margin, global supplies are decreasing," the firm said.
Trade estimates peg Australia's crop around 21 million to 23 million tons,
and any revision will likely be to the downside, Reilly said. There are
concerns that El Nino, a warming of the waters of the equatorial Pacific Ocean,
could encourage dryness in certain areas and hurt production, he said. The USDA
this month pegged Australia's crop at 23 million.
The USDA's estimate for a Russian crop of 60 million tons is likely
overstated by 1.5 million to 2 million due to dryness, Reilly said. Russia's
deputy agriculture minister earlier this month said farmers would harvest less
grain than previously expected due to worsening macroeconomic conditions and
cold weather that slowed spring planting.
The USDA's estimate for a Kazakh crop of 14.5 million tons is about 1.5
million tons too high, Reilly said. The government's wheat area and yield
estimates for Kazakhstan are overstated, he said.
Russia and Kazakhstan have become more important players on the world wheat
market in recent years. Traditionally, the top five global wheat exporters have
been the U.S., Argentina, Australia, Canada and the European Union.
Strong crops in the U.S. and other countries could make up for some of the
losses elsewhere. Strategie Grains last week marginally increased its European
Union 2009-10 soft wheat production forecast to 126.5 million tons due to
higher production in central and eastern areas.
-By Tom Polansek, Dow Jones Newswires; 312-341-5780;
tom.polansek@dowjones.com
12:50 PM, julio 20, 2009
By Tom Polansek
Of DOW JONES NEWSWIRES
CHICAGO (Dow Jones)--The world won't produce as much wheat this year as
expected, but supplies will still be more than enough to meet demand and
pressure prices, analysts said.
The U.S. Department of Agriculture, in its July supply and demand report,
raised its 2009-10 production forecast 420,000 tons from last month to 656.48
million bushels. Higher output by the U.S. and FSU-12 countries more than
offset reduced estimates for Argentina, Canada and the European Union.
But estimates for Argentina, Russia and possibly Australia are poised to fall
in the coming months as farmers grapple with weather problems, analysts said.
The countries are important exporters on the world market.
"I think the trend in global production estimates is going to start turning
downward," said Dan Manternach, ag services director for Doane Advisory
Services. "I think the fundamentals are leaning toward tighter global ending
stocks."
The USDA, in the supply and demand report, cut its estimate for 2009-10 world
wheat ending stocks by 1.37 million tons from last month to 181.28 million. The
decline ended a series of increases in ending stocks estimates.
Still, the world is nowhere near having a shortage of wheat. Supplies are
considered tight if ending stocks amount to less than a 90-day supply, and the
world has "well over" 100 days of supply, Manternach said.
"There are still plenty of stocks out there to keep prices at a depressed
level," Citigroup analyst Terry Reilly said.
Citigroup estimated world production at 651 million tons, while AgResource
Company estimated production at 640.5 million to 644.5 million. Activity in
U.S. wheat futures will "be based in supply through the summer, namely figuring
out production in chief exporting countries," AgResource said in a note.
Citigroup pegged Argentina's crop at 7.3 million tons, down 2.2 million from
USDA's July estimate. Dryness, low prices and high financing costs have
discouraged producers from planting wheat.
The Buenos Aires Cereals exchange this week trimmed its forecast for 2009-10
wheat area to 2.75 million hectares, a drop of 40.2% on the year and the
smallest area going to wheat in more than 100 years. A wheat area of that size
would eliminate Argentina as a wheat exporter and likely trigger imports of
500,000 tons to 1 million tons, likely from the U.S., according to AgResource.
"On the margin, global supplies are decreasing," the firm said.
Trade estimates peg Australia's crop around 21 million to 23 million tons,
and any revision will likely be to the downside, Reilly said. There are
concerns that El Nino, a warming of the waters of the equatorial Pacific Ocean,
could encourage dryness in certain areas and hurt production, he said. The USDA
this month pegged Australia's crop at 23 million.
The USDA's estimate for a Russian crop of 60 million tons is likely
overstated by 1.5 million to 2 million due to dryness, Reilly said. Russia's
deputy agriculture minister earlier this month said farmers would harvest less
grain than previously expected due to worsening macroeconomic conditions and
cold weather that slowed spring planting.
The USDA's estimate for a Kazakh crop of 14.5 million tons is about 1.5
million tons too high, Reilly said. The government's wheat area and yield
estimates for Kazakhstan are overstated, he said.
Russia and Kazakhstan have become more important players on the world wheat
market in recent years. Traditionally, the top five global wheat exporters have
been the U.S., Argentina, Australia, Canada and the European Union.
Strong crops in the U.S. and other countries could make up for some of the
losses elsewhere. Strategie Grains last week marginally increased its European
Union 2009-10 soft wheat production forecast to 126.5 million tons due to
higher production in central and eastern areas.
-By Tom Polansek, Dow Jones Newswires; 312-341-5780;
tom.polansek@dowjones.com
No hay comentarios:
Publicar un comentario