WASDE Wheat Stocks Higher

December 10, 2010 01:49 AM

WHEAT: U.S. wheat ending stocks for 2010/11 are projected 10 million bushels higher this
month reflecting lower domestic use. Projected food use is lowered 10 million bushels on the
latest mill-grind data from the U.S. Census Bureau which indicate flour extraction rates that are
higher than the long-term average for a third straight year. With historically high wheat prices,
millers continue to get more flour out of each bushel of wheat. Total exports are unchanged,
but small shifts among classes result in higher projected exports of Hard Red Spring and White
wheat and lower projected exports of Hard Red Winter wheat and durum. The projected
marketing-year average price received by producers is narrowed 5 cents on each end of the
range to $5.30 to $5.70 per bushel.

Global 2010/11 wheat supplies are projected 4.9 million tons higher this month reflecting an
increase in EU-27 beginnings stocks with lower 2009/10 feed use and higher 2010/11
production in Australia, Pakistan, Canada, Brazil, and Ukraine. Production for Australia is
raised 1.5 million tons as higher reported yields in eastern Australia continue to boost
production prospects. Recent, heavy rains in many of these same areas, however, have
dampened production prospects and reduced wheat quality. Official government statistics for
Pakistan and Canada boost production 1.3 million tons and 1.0 million tons, respectively.
Brazil production is raised 0.4 million tons as favorably dry harvest weather in southern
growing areas add to output. Ukraine production is raised 0.2 million tons on the latest
government data. Partly offsetting these increases is a 0.5-million-ton reduction for Russia.
World wheat trade for 2010/11 is projected lower this month as tighter supplies of high quality
wheat raise world prices and slow demand in several smaller markets. Wheat imports are also
reduced 0.5 million tons each for Brazil and EU-27. Larger production reduces the need for
imports in Brazil. In EU-27, lower expected wheat feeding reduces demand for imported
wheat. World wheat exports are lowered 1.7 million tons with reductions for Australia, China,
Canada, and Mexico. Export prospects for Australia and Canada are reduced reflecting the
lower quality of wheat in both countries this year. Partly offsetting are increases for Iran,
Serbia, and Croatia.

Global 2010/11 wheat consumption is raised with higher expected wheat feeding in China and
higher expected feed and residual disappearance in Australia and Canada. Reduced
government incentives to export wheat from China make more wheat available for domestic
feeding. Larger supplies of lower quality wheat in Australia and Canada are expected to boost
feeding and increase residual losses in both countries. Partly offsetting are 0.5-million-ton
reductions in feed use for both EU-17 and Russia, and small declines in food use in several
countries due to high prices. Ending stocks are raised 4.2 million tons with the largest
increases for Pakistan, EU-27, Australia, and Canad

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