WASDE: Lower U.S. Wheat Supplies

June 9, 2011 02:36 AM

WHEAT: U.S. wheat supplies for 2011/12 are lowered this month as reduced carry in more than offsets an increase in expected production. Beginning stocks are lowered 30 million bushels with a 10-million-bushel reduction in imports and a 20-million-bushel increase in exports for 2010/11, both based on the pace of shipments to date. All wheat production for 2011/12 is forecast at 2,058 million bushels, 15 million higher than last month. The winter wheat production forecast is raised 26 million bushels with higher forecast yields for Hard Red Winter, Soft Red Winter, and Soft White Winter wheat. Partly offsetting is a projected 11-million-bushel reduction for durum and other spring wheat production as seedings are projected 290,000 acres lower. Flooding and persistent wet soils have delayed planting in North Dakota and Montana well beyond the normal planting window.

U.S. wheat usage for 2011/12 is unchanged. Ending stocks are projected 15 million bushels lower at 687 million bushels, but remain above the 10-year average. The 2011/12 season-average farm price for all wheat is projected at a record $7.00 to $8.40 per bushel, up 20 cents on both ends of the range, reflecting both tighter domestic supplies and higher expected corn prices. The forecast 2010/11 wheat farm price is also raised this month, up 5 cents per bushel to $5.70 per bushel.
Global wheat supplies for 2011/12 are projected slightly lower this month as an increase in beginning stocks is more than offset by lower production. Global beginning stocks are projected 4.9 million tons higher mostly reflecting increased stocks in Russia as feeding is reduced 2.0 million tons and 5.0 million tons, respectively, for 2009/10 and 2010/11. Beginning stocks for 2011/12 are also raised 0.5 million tons each for Argentina and Canada with the same size reductions in 2010/11 exports for each country. Partly offsetting is a 1.5-million-ton decrease for 2011/12 beginning stocks for Australia with higher 2010/11 exports.
World wheat production is projected 5.2 million tons lower for 2011/12. At 664.3 million tons, production would be the third highest on record and up 16.1 million from 2010/11. This month’s reduction for 2011/12 mostly reflects a 7.1-million-ton decrease for EU-27 wheat output. Persistent dryness, particularly in France, but also in Germany, the United Kingdom, and western Poland, has reduced yield prospects for EU-27. Production is also reduced 1.0 million tons for Canada as flooding and excessive rainfall, particularly in southeastern Saskatchewan and adjoining areas of Manitoba, are expected to reduce spring wheat seeding. Production is increased 1.5 million tons for Argentina and 0.5 million tons for Australia, both reflecting favorable planting conditions and strong producer price incentives to expand area. Production is also raised 0.5 million tons for Pakistan as increased use of higher quality seed and adequate water supplies resulted in higher-than-expected yields.
Global wheat trade for 2011/12 is projected slightly higher reflecting a 0.5-million-ton increase in expected imports by EU-27. Exports are lowered 3.0 million tons for EU-27. Export increases of 2.0 million tons and 1.0 million tons, respectively, for Australia and Argentina offset the EU-27 reduction. Exports are raised 0.3 million tons for Pakistan with the larger crop. Global wheat consumption is projected down 3.3 million tons, mostly reflecting a 2.5-million-ton reduction in EU-27 domestic use.
Wheat feeding is lowered 0.5 million tons for Canada. Global ending stocks for 2011/12 are projected 3.0 million tons higher as decreased wheat feeding in earlier years raise projected stocks in Russia, more than offsetting declines in Australia and EU-27.


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