Beware! Global wheat stock is just vanishing

It is alarming and the threat is very much here. If you have not heard about it till now, hear it from the horse's mouth.
US agriculture secretary Edward Schafer said this week that the world has never been less secure about the near-term future of wheat.

Schafer told the International Food Aid Conference meeting in Kansas City that global wheat stocks are at a historic 30-year low.

What else, US wheat stocks are at unprecedented 60-year low. Against this background is the emergence of the highly virulent African stem rust that is spreading quickly.

Schafer said that 75 per cent of US wheat acres are planted to varieties that are highly susceptible to that disease. US wheat Futures closed solidly higher in a technical rally, traders said.

CBOT May wheat closed up 28 3/4 cents at $9.24 1/2 per bushel, KCBT May wheat is up 34 3/4 cents at $9.85, and MGE May wheat is up 12 1/2 cents at $12.4.

The government of Kazakhstan has imposed a ban on the export of wheat until September 1. The country has been exporting wheat at a record rate of 1.1 million to 1.4 million metric tonnes a month, having exported to date 8 million tonnes of wheat out of the 2007 harvest.

Wheat stocks in Kazakhstan on April 10 totaled 8.1 million tonnes, including 4.7 million tonnes of milling wheat. Kazakhstan harvested last year 20.1 million tonnes of grain.

Wheat is among the planet's most important food crops, but it has a natural enemy that can turn the crop into a black tangle of broken stems. Cornell University hopes a new $26.8 million grant can help them combat the emergence of deadly new strains of rust disease and help avert a pandemic that could produce catastrophic wheat crop losses worldwide.

The grant, from the Bill & Melinda Gates Foundation, will be used to develop improved rust-resistant wheat varieties and support critical wheat rust screening facilities in Kenya

and Ethiopia, as well as track the spread of new variants and foster global awareness, said project director Ronnie Coffman of Cornell.

The International Grains Council forecast 2008-09 global wheat ending stocks 128 million metric tonnes, a rise of 16 million tonnes on the year. This was the IGC's first supply/demand forecast for the 2008-09 global wheat campaign.

Most of the recovery in stocks will be in the world's five major wheat exporters, with their combined carryout up around 10 million tonnes to 36 million, said the IGC.

IGC forecast 2008-09 world wheat usage at 630 million tonnes, up 18 million on the year. And 2008-09 world wheat trade was also forecast by IGC to rise by 7 million tonnes on the year to 110 million, with larger imports expected by India, Algeria and Iraq.

The United States is a major wheat-producing country, with output typically exceeded only by China, the European Union, and, sometimes, India.

During the early 2000s, wheat ranked third among US field crops in both planted acreage and gross farm receipts, behind corn and soybeans. Presently, almost half of the US wheat crop is exported.

The US wheat sector enters the 21st century facing many challenges, despite a strong domestic market for wheat products.

US wheat harvested area has dropped off 28 million acres, or nearly one-third from its peak in 1981, because of declining returns compared with other crops and alternative options under government programs. Despite rising global wheat trade, US share of the world market has eroded in the past two decades.

The USDA table World wheat supply and disappearance shows that the area planted with wheat globally has been relatively static for the last 20 years, in the range 212-231 million hectares.

For the last 4 years, the two biggest producers of wheat have been China and India, China a small net exporter, India a net importer. One of the biggest importers is Egypt, which imports almost half its wheat requirements.