What about wheat Market?
According to USDA data the marketing year that started June 1, Australia is going to produce wheat 24.5 million tons this year after collecting 13 million tons a year earlier and 10.8 million in 2006. Drought destroyed Australian crops for the past two years
Similarly other major gain producers also going to increase their production in the coming year.
Additional Information:
What about wheat Market?
According to USDA data the marketing year that started June 1, Australia is going to produce wheat 24.5 million tons this year after collecting 13 million tons a year earlier and 10.8 million in 2006. Drought destroyed Australian crops for the past two years
Similarly other major gain producers also going to increase their production in the coming year.
How this will affect the Wheat Market? Which companies will benefit most?
Answers
106 points
vision answered one year ago …
supply and demand will make the price increase, and future traders will drive the price up also.
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2183 points
ChaosNantuko answered one year ago …
If the data turns out to be correct (its an estimate, so its not perfect), then the supply and demand situation should change drastically, and the price of wheat should fall. That being said, without seeing some worldwide demand numbers, its tough for me to judge weather or not this 12 million ton increase is a significant one, or just a drop in the bucket.
After looking around, I just read that Austrailias production is only about 1.5% of global supply. If thats true, then the increase Australia is experiancing won't be really significant worldwide.
According to http://www.pia.gov.ph/Default.asp?m=12&fi=p080422.htm&no=32, "the estimated 2007-2008 worldwide wheat demand of 619 million metric tons". So yea, Australias gain turns out to be insignificant. I'm curious as to how much the other countries are increasing it though.
