U.S. Wheat Associates on world wheat supply
Farm and Ranch August 5, 2010 A drought reduced crop primarily in Russia has been driving wheat prices higher along with fund buying. Do the fundamentals justify the soaring prices or is the market overreacting? Time will tell but U.S. Wheat Associates spokesman Steve Mercer says the world wheat supply isn’t much different from last year. Mercer: “The world supply of wheat even with problems in Russia is not going to be that much less for this year so it is odd the markets are reacting this much, this fast, but you know it is a good opportunity for us.” Mercer says Russia’s woes will definitely be positive for U.S. wheat exports. He says the International Grains Commission recently raised its estimate of U.S. exports by 17 percent from its original forecast. Mercer: “We’ve seen a similar rise in USDA‘s forecast. It will be really interesting to see what they say next week. The world supply and demand estimates come out on August 12th so it will be interesting to see what they say.” Despite the short crop for Russia it has continued to make wheat sales to Egypt. Analysts say such sales may merely reflect long held stockpiles of wheat and grain from the harvest in areas near ports. The Russian government has denied plans to ban exports but Wednesday a Russian grain company official says restrictions are under discussion. The United Nations said this week the Russian drought threatens winter grain plantings with potentially serious implications for world wheat supplies in 2011-12. I’m Bob Hoff and that’s the Farm and Ranch Report on Northwest Aginfo Net. ? ? ? ?
