A FORECAST jump in world wheat demand won't be enough to trigger the corresponding rise in prices, with world grain prices set to decline over the coming 12 months.
Forecasts at the ABARE Outlook conference reveal only oilseeds are to enjoy better prices in the coming year, with the world oilseed indicator set to rise by four per cent in 2010-11 to average US $365 a tonne.
The ABARE commodities papers say that despite a "modest increase" in demand for wheat over the coming year, large global wheat supplies will have a negative impact on prices.
It's the same story for coarse grains right across the spectrum, with the boom in ethanol production not enough to fend off the impact of higher world production and growing stocks.
ABARE forecasts the world wheat indicator price to fall six per cent in 2010-2011 to average $196/t on the back of a 23 per cent decline in the past year.
US corn prices - the world indicator price for coarse grains – will average about US$157/t over the September to August marketing year, compared to a slightly higher US$161/t in 2009-10.
The accumulation of grain stocks is doing all the wrong things to the world grain market, negating the effect of growing world consumption, strong demand, and world-wide falls in production.
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