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Our Bureau

Mumbai, Aug 3 Quite in line with expectation, world grain prices eased considerably during July. Improved crop prospects and supplies – wheat, corn (maize), rice and soyabean – and falling crude prices provided the trigger for speculators to liquidate their long positions.

August usually is the crucial month when weather can make or break crops. Conditions across the world, especially in the US, need to be watched closely.

Crop conditions in India can potentially impact world prices of a host of commodities; and trading houses are already closely monitoring conditions here. Meanwhile, the world wheat balance sheet for 2008-09 continues to look healthy with consumption set to trail production for the first time in three years and world inventory poised to reverse the declining trend.

World wheat production during 2008-09 has been projected further up at a record 662 million tonnes (608 mt) following higher acreage and improved weather, by the London-based International Grains Council (IGC) in its latest update. World wheat consumption is projected to increase by close to five per cent to again a new high of 639 mt. (610 mt) as wheat may replace some high priced corn in feed rations in the US, Canada and the EU, the agency pointed out.

Ending stocks are set to look healthy at 144 mt (121 mt). As for maize, the world production is forecast at 759 mt. (785 mt), with the US contributing to 295 mt. Maize consumption is projected to reach a record 782 mt (774 mt) with feed demand in emerging economies and industrial use (ethanol production) especially in the US, expanding.

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