The drought in Russia has cast an effect on the wheat inventories all over the world. The wheat futures increased for another day as a result of the announcement made by the U. S. Department of Agriculture that the global wheat production will fall near to the level of three-year low.
As per the USDA, the wheat output will plummet to 645.7 million metric tons in the 2010-2011 season, which is a significant low in the past three years. The figure also fell below the last month’s estimates of 661 million tons.
Also, as projected, the global wheat inventory will reach to a level of 174.76 million tons, which is the lowest in the two years but 49.9 million tons larger than that in 2007-2008 season.
On Friday, the news for the reduction in the wheat production led to rise in Chicago wheat futures by 0.7%. The wheat for the December delivery jumped up 1.1% to $7.5225 a bushel, an extension on increase of 2.6% a day before.
In the morning session, the prices of corn for the December-delivery shot up 0.9% to $4.2525 a bushel in Chicago and the soyabean for the November-delivery extended 0.7% to $10.36 a bushel on a previous gain of 0.2%.
The USDA reported that Russia, the largest wheat exporter, has been expected to export 3 million tons of wheat and the second-largest wheat grower, Ukraine, will produce 17 million tons of wheat, a drop of 15%, as anticipated last month. An estimated 11.5 million tons of wheat will be produced by Kazakhstan. The European Union will produce 137.5 million tons of wheat.