The 2006/07 global wheat outlook is for lower production and stocks. Global ending stocks are projected to be the lowest in 25 years. World wheat production, projected at 600 million metric tons, is down 3% from 620 MMT produced in 2005/06. The year before that, the world produced 629 MMT. Most significantly, production is down in the major exporting countries.

The U.S. Department of Agriculture released its initial assessments of U.S. and world wheat prospects in their May 12 World Agriculture Supply and Demand Estimates report.

U.S. wheat production is expected to fall 11% from 2005/06, to 51 MMT. The U.S. wheat-by-class projections for 2006/07 will be published in the July 12 WASDE but, in the meantime, USDA can report that the survey-based forecast of U.S. winter wheat production is down 12% because of increased abandonment and reduced yields due to drought. Total U.S. wheat supplies will likely be down 8%.

USDA expects wheat production to drop in the Black Sea region (from 92 MMT to 76 MMT). Forecasters also see a slight production decrease in Australia (from 24.5 MMT to 24 MMT) and Canada (from 26.8 to 26 MMT).

Wheat production in India is forecast to fall from 72 MMT in 2005/06 to 68 MMT this next marketing year. Imports for India are projected at 4.5 MMT, up from 200,000 tons in 2005/06.

Production in Argentina is forecast to increase from 12.5 MMT to 15.5 MMT. The EU should also see a better year, with production forecast at 125.5 MMT, up from 122.6 MMT. North African wheat production is also expected to improve, from 14.3 MMT to 18.7 MMT in 2006/07.