GLOBAL - Latest estimates from the International Grains Council (IGC) again saw increased production estimates for the 2014/15 world wheat harvest.
Global wheat production is forecast at 719Mt, up 2Mt from the previous forecast, mainly driven by an upward revision the Argentinian forecast from 12.5Mt to 13.9Mt.
Although demand forecasts were increased by 1Mt to 709Mt, it would still suggest a global wheat surplus of around 10Mt at the end of this season.
This estimate is in line with the latest USDA estimates (see chart below).
With forecasts looking more likely to be realised, global end of season stock levels could hit a level that has not been seen since 2011/12 and the prospect of this is acting as a weight on global prices.
Such a surplus of wheat could maintain a cap on global wheat prices relative to other grains, which could be further intensified if there is a consecutive large harvest in 2015/16.
TheCropSite News Desk