Wednesday, September 06, 2006

 

Let Us Eat What?


According to the International Grains Council,
World grain supplies are forecast to tighten in 2006/07 as production falls and demand continues to grow. The production forecast, at 1,575m. tons
(1,599m.), is marginally lower than last month, mainly because of the deterioration in prospects in the EU. The consumption forecast is also lowered, to 1,626m. tons but, despite a reduction in feed use, remains 13m. tons above the 2005/06
total. This reflects a further steep rise in industrial use, notably for ethanol.


European wheat production is down, due to the early summer ante-canicule canicular weather (heat wave) and the cool, wet canicule (hampering harvest in France).

Prior to the 02/03 season, stocks of wheat were 199 million tons, enough to cover consumption for a third of a year (120 days). At the close of 06/07, they are reckoned to be only 117 million tons -- ten weeks, down seven weeks from five years earlier. But then, on the bright side, we can continue to deplete stocks at this rate for another six or seven years! We'd better eat our cake while we can.

MAIZE (CORN): Higher estimates for the US and
China, reflecting favourable growing conditions, lift the global 2006 maize production estimate by 4m. tons, to 696m., therefore exceeding last year’s 693m. However, this remains well short of forecast consumption of 723m. tons, up by 25m. from 2005/06

Second best year of the past five, yet production only covers fifty weeks of consumption. Production has exceeded consumption only once in the past five years, and even that (04/05) year's harvest would not have covered this year's consumption. Cumulative production 02/03-06/07: 3332 million tons. Cumulative consumption: 3375 million tons. Stock change: 43 million tons reduction. Current stocks: 100 million tons -- seven weeks of cover at current consumption rates. We'd better hope growing conditions stay favorable in China and the US and improve elsewhere.



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