Prairie farmers aren’ t the only ones dealing with bad growing conditions this year.
The Canadian Wheat Board says a string of poor crops are heading toward harvest around the planet.
That means world wheat stocks should continue to drop in the next few months, say board weather analysts.
“Supplies are coming down this year by the looks of it,” said Bruce Burnett at a wheat board weather briefing for the grain industry.
“In general, you’ re looking at lower areas in a lot of the major producing countries, plus the fact that we’ re getting below average yields in a number of countries.”
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That is good news for prices, but won’ t lead to a major rally, said board market analyst Dwayne Lee.
“There’ s still lots of wheat in the major exporting countries,” he said.
Western Canadian farmers have been dealing with poor seeding conditions this spring, with excessive moisture in eastern Manitoba and excessive dryness in western Saskatchewan and Alberta.
Wheat production is expected to fall to 23.8 million tonnes and durum to 4.5 million tonnes. The board expects a prairie wheat yield range of 28.4 to 35.4 bushels per acre, with an expected average of 32.6 bushels per acre.
Seeding was also delayed in much of the American spring wheat area because of excessive moisture, causing a late crop and uneven emergence. However, overall moisture conditions in the American spring wheat belt are much better than on the Canadian Prairies, so there are still prospects for a good crop.
But Europe’ s winter wheat crop doesn’ t have a chance to recover from terrible conditions it has suffered since last fall.
“I think it’ s too late for the winter crops to escape the low yields that we’ re expecting from them,” said board weather watcher Kevin Klassen.
Wet weather damaged crops in northern Europe, especially in Great Britain, last autumn and through the winter. Dry weather has arrived in the last month, helping crops mature and staving off the threat of disease. But with less than a month to harvest, the crop’ s potential has been limited.
“We think it’ s much too late for the bulk of the crops now,” Klassen said.
“It’ s certainly a below average year.”
Spring crops in Europe still have a chance to do well, but since the bulk of European Union crops are winter crops, that won’ t have a big effect on world wheat stocks.
Continuing drought will hurt North African durum crops, though they will not likely be as bad as last year.
China’ s crop is also well below average because of drought. In the past month the crop’ s yield potential has dropped more than 10 percent, said analyst Guy Ash.
With harvest coming in a few weeks, there’ s no real chance to recover.
“If conditions continue dry, they’ ll continue to drop.”
Australia’ s winter wheat crop has just been planted. Surface soil conditions are good because of recent rains, but subsoil conditions are terrible because of drought last year. Lots more moisture will be needed by the fall, when the crops begin growing.
That still leaves a few months for Australian conditions to improve.
“It’ s too early in the growing season to have a good idea of what’ s going on,” Ash said.
Burnett said a rare patch of good growing conditions exists in eastern Europe and Russia.
“But by no means does that make up for the areas with negative production levels,” he said.
With most of the summer’ s crops about to come in, the next batch of crops to watch will be those in South America and Australia. There, the winter crops have been planted but will soon be dormant and the spring crops are still a few months from seeding.
The board forecasts world production will fall to 560-565 million tonnes in 2001-02. That’ s the lowest since 1995-96.
World stocks will be the tightest since 1982-83 and the stocks-to-use ratio will be the lowest since 1972-73.
The board expects wheat prices to improve slightly in the next year, Lee said. But these weather problems and reduced yields probably won’ t cause a surge in prices.
“With just-in-time inventory and improved logistics, the world’ s become a little more comfortable with lower stock levels,” Lee said.
The American corn crop is also probably going to be large, putting a brake on wheat prices.
But the weather problems around the world do reinforce the board’ s belief that wheat prices will not slide this year and might even improve, Lee said.
