The world will have even more wheat than expected, increasing a grain glut that’s kept a lid on global food inflation.
The US Department of Agriculture raised its outlook for world stockpiles by 0.9 per cent to 197.85 million metric tons in a recent report; that's bigger than the 196.22 million expected by analysts surveyed by Bloomberg. The agency also boosted its estimate of global corn inventories by more than expected.
Wheat and corn prices fell in Chicago after the report. The world’s farmers will collect bigger harvests of both crops than forecast last month, the agency said. Combined global wheat and corn inventories will rise to the highest since 2000, easing concern about shipments from Ukraine and Russia amid political turmoil in the region.
“There’s still plenty of corn throughout the world,” Terry Reilly, senior commodity analyst at Futures International in Chicago, said in a telephone interview. With bigger wheat stockpiles, “we have a little bit more wiggle room if Russia or Ukraine export a little less,” he said.
World grain production in the season that began 1 July will rise to the biggest ever, the United Nations’ Food & Agriculture Organisation said 5 February. The agency’s measure of food prices fell in January to the lowest level since 2010.
“Combined grain supplies are substantial, and the market will not shift attention to the spring-planting progress and crop development across the Northern Hemisphere,” Jerry Gidel, the chief feed-grain analyst at Chicago-based Rice Dairy LLC, said in a telephone interview.
Bloomberg News, edited by ESM
