Wheat use in feed is set to reach the highest in more than 20 years, lifted by its "competitive cost" and supplies boosted by harvests which look like beating previous expectations, the International Grains Council said.
The IGC, in a much-watched monthly report, hiked its estimate for the world wheat harvest in 2011-12 by 8m tonnes to 674m tonnes, citing "significant upward revisions" to hopes for Europe, India, Russia and the US.
However, most of the increase – 6m tonnes – will be swallowed in increased expectations for use, as farmers turn increasingly from highly-priced corn to wheat in livestock feed.
Black Sea exports
"A firmer world economy is expected to underpin meat demand, especially in developing countries," the intergovernmental group said.
"While corn remains by far the biggest grain feed ingredient, the use of wheat in animal rations has increased and is expected to reach 124m tonnes, the most in more than two decades."
The council also highlighted the "relatively ample global supplies of lower quality wheat", following rain-damaged harvests in Australia, Canada and Germany last year, and an "expected upturn" in exports from the Black Sea producers.
Separately, SovEcon, the Moscow-based analysis group, reported that Russia’s grain exports had reached a record 2m tonnes this month, including 1.8m tonnes of wheat.
The revisions showed wheat stocks ending 2011-12 at 190m tonnes, higher than previously expected if still 2m tonnes lower year on year.
The IGC also edged its estimate for world corn stocks higher, by 3m tonnes to 122m tones, forecasting record crops in China, the US and the Ukraine.
Ukraine deputy farm minister Mykola Bezugly earlier on Thursday suggested that the country could reap a record 18m-tonne corn harvest this year.
While the IFC lifted its estimate for world corn consumption too, by 2m tonnes to 863m tonnes, it highlighted the feed use would depend on the grain’s "price relationship with lower-grade wheat", and forecast "much slower" industrial use.