The USDA has said global wheat supplies for 2014/15 will hit record highs, which is good news for stability but quality will be critical for industry, says an analyst.
The United States Department of Agriculture (USDA) said world wheat production for 2014/15 would be up 10.9m tons to a record 716.1m. The rise would be predominantly bumped up by increases in Russia (6m tons) and Ukraine (1m), as well as stronger supply from the US.
Findings and forecasts were published in the USDA’s latest World Agricultural Supply and Demands Estimates (WASDE) report .
US wheat supplies were raised mainly due to an increase in forecast hard red winter wheat production – the largest in Colorado and Nebraska – as well as smaller increases for soft red winter, hard red spring and durum wheat.
The USDA raised US wheat exports by 25m bushels because of the larger hard red winter wheat crop.
Despite the surge in production and supply, the USDA said trade would remain “nearly unchanged” – offset by reductions in the EU and several other countries. “The changes reflect larger crops in Russia and the United States as well as quality problems in EU,” it said.
Although, the USDA said supplies were rising faster than use; pushing up global ending stocks to 3.4m tons – keeping stocks at a three-year high.
Warning: Supply is good, but quality will be critical
Amandeep Kaur Purewal, senior analyst at the Home Grown Cereals Authority (HGCA) - division of the Agriculture and Horticulture Development Board (AHDB), – said that quality would be more important for industry.
“There are other things to consider. It is one thing having a large wheat crop around the world, but the other thing is quality. Just because it’s a big wheat crop, doesn’t mean it’s going to be suitable for industry,” she told BakeryandSnacks.com.
So far, there had been indications from France and Germany that wheat quality may be poor, she said. “It could potentially impact the milling quality wheat; being downgraded to feed quality,” she said.
“You basically want favourable weather conditions to continue until the crop is harvested, because until then there’s still an element of risk.”
US, EU corn crops up
Global coarse grain supplies (corn, sorghum, barley, oats) would be up 4.9m tons – “mostly reflecting larger expected corn crops in the United States and EU and increased barley production for FSU-12”, the USDA said.
Corn consumption for 2014/15 was raised 2.3m tons, predominantly due to higher use in the US. EU use of corn was actually down, as poor wheat quality steered feed use away from corn to wheat.