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November 1999
Wheat production in the major exporting countries
(Canada, Australia, and Argentina, and European Union) for the
1999/2000 season is estimated at 159.4 million, up 2.5 million
tons this month, but off 0.9 million from 1998/99. Beneficial
weather and an increase in area lifted wheat production this
month. The United States and European Union produced less wheat
this year, but the shortfall has been mostly offset by increases
in Argentina, Canada, and Australia. The major competitors
produced a record 167.9 million tons in 1996/97 due mainly to
high wheat prices and favorable weather. As international wheat
prices fell, producers adjusted plantings, higher or lower, on
factors such as setaside and price relationships with other
commodities. In Argentina, more favorable returns for soybeans
and sunflowerseed reduced wheat area from three years ago, in
Australia, wheat returns were more favorable than wool or barley
resulting in area expansion. Wheat area in Canada is lower due to
stronger rapeseed and barley demand, along with rotation
requirements, but in the European Union, set aside policy
dictated wheat area reductions; and in the United States the
decline in area is caused by depressed wheat prices making
producers switch to alternative crops. Despite a marginal
reduction year-to-year in the major competitors production,
July/June 1999/2000 exports are estimated to increase 5.9 million
tons. In the United States, there is a 9 percent decline in
production but exports are estimated to increase 0.5 million
tons. A small expansion in global imports and reductions in
exports by other countries, especially Eastern Europe and Turkey,
account for the larger export prospects for the major exporters.
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