The world wheat supply looks set to be plentiful this year, raising hopes that food prices will fall.
The International Grains Council has predicted global wheat production of 651 million tonnes for 2009/10, below last year’s record 688-million-tonne crop, but still the second largest on record. Consumption is expected to be about 640 million tonnes.
The weather over the next three months would determine whether the crop was in surplus or deficit, said Home Grown Cereals Authority analyst Jack Watts, but experts were confident it would be in surplus, meaning lower costs for food producers.
However, concerns remain over maize - the main global feed grain - with stocks delicately balanced and production estimated to be closely matched to consumption. The US was producing less maize and more soya and putting maize into bioethanol production, explained Watts.
The soya forecast would depend on Argentina’s recovery from a dry growing season and farmers’ ability to overcome Government-imposed export rules.
Sterling’s value would also be critical to the shelf price this year as the UK had to import many commodities, added Watts.