13 Aug 2010

World wheat forecast cut

6:16 am on 13 August 2010

The US Department of Agriculture has sharply cut its outlook for world wheat production after revising down its crop forecast for Russia.

Global production is now forecast to be 15.3 million tonnes lower at 645.7 million tonnes.

Production for Russia, which has seen its crops devastated by drought and high temperatures, was lowered by 15% to 45 million tonnes. Kazakhstan also had its forecast cut.

But world wheat stocks still remain above crisis levels seen in 2007-08.

The USDA says stocks will fall from just under 194 million tonnes to 174.8 million tonnes.

The BBC reports the cut to production forecasts was bigger than analysts had expected.

But it was offset by increases in production forecast in the United States, India, Australia and Uzbekistan.

Chicago Board of Trade wheat for September delivery rose more than 30 cents to $US7.25 a bushel after the announcement.

Russian Prime Minister Vladimir Putin had already warned that this year's grain harvest would be worse than previously thought.

Last week, Russia announced a ban on the export of grain from 15 August - 31 December, after crops were hit by drought and wildfires.

According to the US Ministry of Agriculture, Russia was the world's third largest wheat exporter in 2009, behind the US and Canada.