Global wheat markets tumble on USDA supply forecast

Increased plantings and favourable growing weather across the Black Sea, Europe and Middle East is expected to see global wheat production climb to record levels in the 2019/20 growing season, they said.

Global wheat markets tumbled on the USDA's forecasts for abundant supplies and rising stocks, with US wheat futures declining by 3-5 per cent for the week.

Global wheat production is projected to increase by 46 million tonnes from the previous year to a record large 777.5mt. It was the USDA's first assessment of the 2019/20 world grain production supply and demand estimates, where the northern hemisphere wheat crops will start to be harvested in the coming weeks.

The EU is expected to have the largest increase in wheat production of 16.5mt to 153.8mt, as it recovers from last year's drought.

Russia is forecast to harvest its second-largest wheat crop of 77mt. Neighbouring Ukraine is forecast to produce a record large 29mt of wheat.

Larger crops in Australia, Canada and Argentina will also bolster the size of the 2019/20 world wheat crop, it said.

USDA forecast Australia's wheat crop at 22.5mt up from 17.3mt in 2018/19.

Abundant rainfall across the Middle East is also expected to result in record large wheat crops in Iran and Iraq as well as large crops in Syria and Turkey, according to the USDA.

Global wheat consumption is set to increase by more than 21mt to 759mt on larger feeding and food usage, it said. Despite the sharp 3pc increase in global consumption, world wheat ending stocks are forecast to increase by 18mt to a record large 293mt.

Russia is forecast to be the leading world wheat exporter with exports of 36mt, slightly down from 37mt in 2018/19.

World barley production is forecast to increase by 13.5mt to a record large 153.3mt on bigger crops in the EU, Russia, Ukraine and Canada the USDA said.

Local grain prices continued to soften last week with declines in global markets and general rain across Victoria and South Australia.