Global wheat stocks seen at 28-yr low

Global 2007-08 wheat carryover stocks are likely to fall to a 28-year low of 111 million tonnes, the International Grains Council said in its latest report.

Global wheat output this year is seen at 607 million tonnes, up 16 million tonnes from last year, but down 7 million tonnes from the Council's previous estimate due to lower output in European Union and Canada, the report issued late Thursday said.

Lower output has pushed up global wheat prices, leading to lower consumption of the cereal as feed. As a result, global wheat demand is also seen lower at 614 million tonnes, down 3 million tonnes from the Council's last estimate in July.

"Although much of the reduction in the world crop estimate is offset by lower consumption, forecast of wheat stocks at the end of 2007-08 are placed 2 million tonnes lower than previously, at 111 million tonnes, the smallest since 1979-80, with those in the five major exporters (Argentina, Australia, Canada, the EU and the US) expected to be especially tight," the report said.

It said global trade in wheat and flour is also likely to be lower at 107.4 million tonnes, down 3.3 million tonnes from the July estimate, on higher crops in India and Brazil.

The Council said maize output in the current year is seen at a record 755 million tonnes, up 8.5 per cent on year due to higher production expected in the US. Though the maize crop has deteriorated in EU and Canada on dry weather, the fall will be more than offset by a 10 million tonnes increase in US output.

The Council said global maize consumption is also seen at a record 762 million tonnes due to a sharp rise in industrial use. Higher consumption will reduce global ending stocks for 2007-08 to 96 million tonnes, the smallest since 1983-84.