International markets for wheat and coarse grains were characterised by substantial production shortfalls in 2006/07 following weather related reductions in major production areas. Australia, suffering a severe drought, has harvested 61% less wheat and 51% less coarse grains than in the previous year, causing a sharp drop in both exports and ending stocks. Production of wheat and coarse grains fell substantially in the European Union (EU) and the United States, too. Both weather-related yield reductions and a smaller cereal area harvested contributed to this. In total, Australia, the EU and the US produced some 57 Mt less wheat and coarse grains than in the previous year. While wheat production in India was in line with historical trends, the country stopped selling its large wheat stocks and had to import 6.5 Mt of wheat in 2006, up from very little in 2005. Good harvests in other countries, notably in China and some African countries, only partially offset these shortfalls.