Russia was the world’s fourth largest exporter of wheat in the past year after the United States, the European Union and Canada, according the USDA. But following drought and wildfires, Russia announced last week that it would not allow exports from August 15 until December 1 – sending wheat futures markets soaring on shortage fears.
On August 6, Chicago Board of Trade (CBOT) wheat prices for September delivery exceeded $7-a-bushel level in United States trade for the first time since September 2008, before falling back to $6.93.
Speaking at a press conference in Ottawa, Vilsack said that there is enough wheat production elsewhere to avoid a repeat of the high wheat prices of 2008.
“There are other countries, including the United States, where wheat production is steady and relatively robust enough not to put us in a situation where we were several years ago when there was a potential shortage globally,” Vilsack was reported as saying at a press conference in Ottawa.
He also said he did not think excessive speculation was unduly fuelling wheat price inflation, according to a Reuters report.
Dutch financial services firm Rabobank has downgraded 2010/11 global wheat production estimates to 644.2m tonnes, compared to 679.8m tonnes last year. However, crop estimates for soy and corn are still high, so although soybeans and corn futures have been tracking gains in the wheat market, a repeat of the commodity price spikes of 2008 is unlikely, analysts have said.
The USDA is due to release its report detailing global and domestic crop projections on Thursday.