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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