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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