Prospects for the 1997 cereal crop have deteriorated somewhat following heavy rains and flooding in early August. Latest official forecasts put the 1997 wheat cop at 6.9 million tons, down from the earlier anticipated 7.1 million tons. However, if weather conditions do not improve rapidly for the remainder of the harvest, losses could be much greater. Nevertheless, wheat output is unlikely to fall as low as last year’s much reduced crop of 3.1 million tons and the country’s grain supply situation should improve somewhat in the current marketing year.