May 10 (Bloomberg) -- World wheat stockpiles will rise from a year earlier as global production increases in Russia, Canada and Australia, the biggest exporters of the grain last year behind the U.S.
World inventories may total 186.4 million metric tons in the season that starts on June 1, up from 180.2 million a year earlier, the U.S. Department of Agriculture said today in a report. Analysts in a Bloomberg survey forecast 186.5 million tons, on average. Global production is expected to jump to 701.1 million tons from 655.64 million tons, according to the USDA.
“The world numbers are a little negative to wheat,” Darrell Holaday, the president of Advanced Market Concepts in Wamego, Kansas, said in a telephone interview after the report. “There are a lot of pockets where we will see those production numbers grow in the Northern Hemisphere.”
Wheat futures for July delivery dropped 2.8 percent to $7.0325 a bushel at 11:35 a.m. on the Chicago Board of Trade. Prices fell as much as 3 percent after today’s report. The grain has declined more than 20 percent since a recent closing peak, meeting the common definition of a bear market.
“World stocks would tend to increase with the increased production around the world,” Mike O’Dea, a risk-management consultant at INTL FCStone in Kansas City, Missouri, said in a telephone interview before the report. “If the weather holds, you’ll have bigger production in the Black Sea, and that’s going to be the main area to watch.”
In Canada, last year’s second-biggest exporter of the grain, production will rise 6.6 percent to 29 million tons, and in Australia, the third-largest shipper, output is expected to surge 11 percent to 24.5 million tons, USDA data show. In Russia, the crop is seen rising 48 percent to 56 million tons.
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