The latest USDA World Agricultural Supply and Demand Estimate report was released today. This month's report cites lower world supplies for wheat and maize; global rice supplies, on the other hand, are up to a record 465.1 million tons.

The world wheat supply is estimated down 6.2 million tons for 2012/2013, reflecting lower production in the Black Sea countries (especially Russia), Australia, and the EU. These reductions have been driven largely by weather-related events: dry weather in Russia and Australia and unusually wet weather in the United Kingdom. Despite lowered supplies, however, the global wheat situation is not a crisis, says Maximo Torero, Director of the Markets, Trade and Institutions Division at IFPRI. "If we look at the stocks today, the stocks are around 172 million metric tons. This is 40-50 million metric tons above what was seen in 2007, so it is not so drastic," Torero says.

Reductions in maize supplies remain more serious, according to Torero. This commodity was hard hit by the US drought, since the US accounts for 50% of the world's maize exports. Global maize production is lowered in today's report by 2 million tons.

The situation remains tight for soybeans due to the US drought and dry weather in South America. However, due to better-than-expected US crops and increased plantings in several major exporting countries, global soybean supplies have risen to 264.3 million tons. This is up 6.2 million tons from last month's estimates. Global rice production is also projected up this month to a record 465.1 million tons. This increase is based largely on favorable weather in India, which increased that country's crop by 1 million tons.

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