Global grain feed supplies forecast higher

In Brazil, coarse grain production is estimated to rise by 5% in 2007-08, to
55 million tonnes. While previous forecasts indicated that Brazilian production
would be lower than 2006-07, higher than expected corn yields due to favourable
growing conditions, including lower temperatures during summer, has contributed
to the upwards revision.

Increase in US
In the US,
coarse grain production is expected to increase 25% year-on-year, to 351 million
tonnes, driven by forecast increases in barley and sorghum production. Prices in
the US for barley and sorghum remain bullish, with demand expected to also
increase in the coming year, especially for animal
feed.

Australia uses less for feed
While global usage
of coarse grains for feed is forecast to increase in the coming year, usage for
feed in Australia is expected to fall 26%, to 3.5 million tonnes. This is
despite a projected 23% rise in Australian coarse grain production, to 13.1
million tonnes, due to improved sorghum yields. Coarse grain exports are
expected to rise sharply.

World wheat figures
World
wheat production is expected to bounce back in 2007-08, increasing 2%, to a
forecast 605 million tonnes. USDA also forecasts an increase in Australian wheat
production in 2007-08 on the back of another drought affected harvest –
increasing from 10.64 million tonnes to 13.10 million tonnes. Increased world
wheat production will allow some rebuilding of global wheat stocks, which could
lead to a decline in wheat prices for the coming year. With low global stocks,
grain prices are particularly sensitive to changes in grain production
forecasts.

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(Source: Meat and
Livestock Australia)