Developing Countries Will Lead Global Rice Import Growth in 2013-22, Says USDA Rice growers positive California MG prices are UP Russia MG Harvest coming to end Egypt open rice exports Vietnam’s rice export in tough competition with India Thai rice exports in May Rise Above Target This Year Viet-Nam Rice exports likely to fall this year
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Wheat May Fall on Bigger Crop
Wheat prices may fall from a nine- month high as bigger-than-expected harvests in Europe and North America swell supplies for a second straight year, said National Australia Bank Ltd., Australia's biggest lender to farmers.

Frost, rain and drought haven't damaged crops, increasing prospects for a near-record harvest and curbing prices that gained 12 percent in Chicago this year, Melbourne-based National Australia said. It didn't give a price forecast.

``The global outlook for wheat prices remains bearish'' in the next six to 12 months, Luke Chandler, an agricultural economist with the bank, said in a report e-mailed today. ``The Northern Hemisphere crop appears to be looking good, with no serious setbacks caused by unfavorable weather.''

Wheat for delivery in May rose for the first day in three, climbing 2 cents, or 0.6 percent, to $3.445 a bushel in electronic trading at 10:40 a.m. London time on the Chicago Board of Trade, the world's biggest agricultural commodity futures exchange.

The futures reached $3.68 a bushel on March 15, the highest closing price for a most-active contract since June 2004. Last year they declined 18 percent, the first losing year since 1999.

Commonwealth Bank of Australia forecast on Jan. 24 that wheat prices might rise 15 percent to $3.40 a bushel as increased production failed to rebuild inventories. Prices might reach $4 with severe weather, Tobin Gorey, an economist with the bank in Sydney, said at the time.

National Australia Bank loans money to farmers in Australia, the world's second-largest wheat exporter after the U.S., and offers derivative products to manage risks tied to commodity prices. Wheat is Australia's most-valuable farm export after beef, worth A$4.2 billion ($3.3 billion) in 2004.

Rising Production

World wheat production is projected to rise 13 percent to 623.8 million metric tons in the year through May, the USDA said on March 10. The department boosted its forecast for global inventories to 146.8 million tons from 145.4 million, up 12 percent from a year earlier.

The 25-nation European Union will be the world's biggest wheat grower in 2004-05, ahead of China, India, the U.S. and Russia, the U.S. department estimates. Wheat is the fourth- biggest U.S. crop, valued at $8 billion last year, behind corn, soybeans and hay.

Wheat growers in U.S. plains states face generally favorable conditions, Lexington, Massachusetts-based Meteorlogix said yesterday. Freezing may have damaged some crops in the Ohio Valley and northern Mississippi Delta.

Temperatures in Western Europe have warmed this month after a cold snap that may have harmed any unprotected wheat, Meteorlogix said. China's farmers will benefit this week from warmer temperatures and rain and Russian wheat is protected by snow, the forecaster said.

Australia accounts for about 17 percent of world trade in wheat. An increase in the October-to-January harvest may weigh on prices, said Malcolm Bartholomaeus, an analyst with Callum Downs Commodity News. Australia on Feb. 15 raised its production estimate for the last harvest by 1 percent to 20.4 million tons.

``Any lift in our output in 2005 will mean that the crop has to shrink by more elsewhere,'' Bartholomaeus said. Prices will fall ``if global production remains at all close to 2004 levels.''

EU Subsidies

Gains in wheat prices may also be pared because of rising supplies of corn, an alternative livestock feed, and increased EU exports that may reduce demand for U.S. grain, Chandler said.

The EU last month began subsidizing wheat exports for the first time since June 2003 to spur sales of its grain. The region's harvest last year was the biggest in a decade, more than 25 percent higher than in 2003, leaving exporters struggling to clear swollen stores.

``The additional exports resulting from these subsidies are likely to further depress world prices,'' Chandler said. Subsidized European grain mainly goes to North Africa and the Middle East.

The EU on March 17 cut the maximum subsidy for exporters of the grain to 8.94 euros a ton, from 10 euros the previous week.
MGR Archive 23.3.2005
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