In its report published on November 29th, Grain Market Report, the International Grains Council (IGC) forecasted a wheat production of 654 million tonnes for 2012-2013 against 695 million for the previous season. In July, the estimate for wheat production was 665 million tonnes.
The grains supply and demand forecasts for 2012/13 have been revised slightly as harvests have been completed in some countries, but the outlook is largely unchanged. Total grains production is expected to fall by 5% year-on-year, and despite a contraction in consumption for the first time in 14 years, stocks are set to fall by 45m t to 324m.
In the wheat market, speculation about dwindling Black Sea supplies and the prospect of export curbs in Ukraine have dominated, yet flows from the region have defied expectations. This has limited price upside from weather-related worries for 2012/13 crops currently being harvested in the southern hemisphere, and conditions for the recently planted winter wheat in the north. Given high prices, the total wheat harvested area for 2013/14 is set to increase by 2%, although conditions for parts of the US crop are a concern.