WASDE Wheat: Stocks Down; Yields Up

August 12, 2010 02:49 AM
 
WHEAT:  U.S. wheat ending stocks for 2010/11 are lowered this 
month as higher expected exports more than offset an increase 
in forecast production and lower projected feed and residual 
use.  Production is forecast 49 million bushels higher mostly 
reflecting higher yields for durum and other spring wheat, 
especially in the Northern Plains.  Winter wheat production is 
also raised slightly as higher yields in the Northern Plains and 
Pacific Northwest more than offset reductions in the eastern 
Corn Belt.  Feed and residual use is lowered 10 million bushels 
as rising values have priced wheat out of feed rations.  Exports 
are projected 200 million bushels higher with declines in foreign 
production, particularly in the FSU-12, reducing global supplies 
and making U.S. wheat competitive in key Middle East and 
North Africa markets.  U.S. ending stocks are projected 141 
million bushels lower from last month, and down 21 million from 
2009/10.  The 2010/11 season-average farm price is projected 
at $4.70 to $5.50 per bushel, up 50 cents on both ends of the 
range.
 
Several changes are made to U.S. supply and use estimates for 
2009/10 based on the latest U.S. Bureau of Census trade and 
mill grind data and revisions.  Exports are raised 16 million 
bushels and imports are raised 4 million bushels.  Food use is 
lowered 3 million bushels.  Thus, feed and residual is estimated 
10 million bushels lower.
 
Global wheat supplies for 2010/11 are reduced sharply with 
world production lowered 15.3 million tons, mostly on reductions 
for FSU-12 and EU-27 countries.  Production for Russia is 
lowered 8.0 million tons as continued extreme drought and 
record heat during July and early August have further reduced 
summer crop prospects.  Kazakhstan production is lowered 2.5 
million tons reflecting the same adverse weather conditions as in 
Russia.  Ukraine production is lowered 3.0 million tons as heavy 
summer rains damaged maturing crops and hampered 
harvesting in western and southern growing areas.  Harvest 
results also support indications that producers reduced input use 
in response to limits on available capital.  EU-27 production is 
lowered 4.3 million tons with yields reduced for northwestern 
Europe on untimely heat and dryness.  Yields are lowered for 
southeastern Europe as heavy rains from the same weather 
pattern that affected Ukraine reduced output.  Production is also 
lowered for Algeria, Brazil, Uruguay, Belarus, and Croatia.  
Partially offsetting are increases for India, the United States, 
Australia, and Uzbekistan.
 
World wheat imports and exports are reduced sharply as tighter 
supplies and higher prices reduce projected global consumption.  
Imports are projected 5.7 million tons lower as higher prices 
reduce demand in a number of countries.  Exports are lowered 
12.0 million tons for Russia partly reflecting the recent 
announcement banning exports through December.  Also 
limiting Russia export prospects is higher expected wheat 
feeding with drought-reduced forage and coarse grain crops and 
policy goals aimed at increasing domestic meat production.  
Exports for Kazakhstan and Ukraine are lowered 2.0 million tons 
each with sharply lower production.  Higher exports from other 
countries partly offset FSU-12 declines.  Exports are raised 1.2 
million tons for China, 1.0 million tons each for Australia and EU-
27, and 0.9 million tons for Turkey.  The 5.4-million-ton increase 
projected for U.S. exports is expected to offset the largest share 
of the decline from FSU-12.  Global ending stocks are projected 
12.3 million tons lower.  At 174.8 million tons, world stocks are 
projected 49.9 million tons higher than in 2007/08 when prices 

soared to record levels. 

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