World Wheat Supply Seen Higher as on Lower Demand
(Corrects to show stockpile forecast was up from October in second paragraph.)
World wheat inventories before the next Northern Hemisphere harvest will be 0.7 percent larger than forecast a month ago as demand fell, the government said. Analysts expected a decline in supplies.
Global stockpiles will total 174.18 million metric tons at the end of May, up from 173 million forecast in October, the U.S. Department of Agriculture said today in a report. The average estimate of 15 analysts in a Bloomberg survey was 171.50 million tons.
A 2.5 million ton reduction in the estimated amount of wheat to be used for animal feed more than offset a projected drop in Australian production to 21 million tons, from 23 million projected last month, according to the report.
Wheat futures for December delivery rose 1 percent to settle at $9.025 a bushel yesterday on the Chicago Board of Trade. The price reached $9.05, the highest since Sept. 28, partly as drought threatens crops in the U.S. southern Great Plains.
World production may total 651.43 million metric tons, down from 653.05 million tons forecast last month, according to the report.
U.S. production in the year that began June 1 will total 2.269 billion bushels (61.76 million tons), unchanged from the October estimate, the government said. U.S. inventories at the end of the marketing year will be 704 million bushels, up from the 654 million estimated in October, because of lower exports. Analysts expected 658 million bushels.
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