The 2010/11 (Jul/Jun) wheat season started just as prices began to rally on production worries in Canada, Europe, and the Black Sea region. With negative weather reducing crop potential wheat prices reversed sharply from the year lows reached in mid June and jumped 28% in both London and Chicago in the first 23 days of July. Higher prices and lower output will alter the dynamics of the wheat market and will result in a decrease in global trade in 2010/11, the second consecutive drop. However, despitethe lower than expected crops in 2010 the.supply of wheat will still be sufficient in the new season thanks to carryover stocks, and upward price potential willbe limited as harvests wrap...up.While stocks from the previous season will counter the crbplosses, the new sea-d son's fundamentals will shift frpm 2009/10, and the abundancejof cheap wheat will drop, reducing trade. At the same time the growing global population will use more of the grain, supporting prices and sparking rallies when output is disrupted.
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