by Kim Anderson, Oklahoma State University Professor and Extension Economist
Wheat ending stocks were lowered four million bushels (mb) to 839 mb. The five-year average for U.S. wheat ending stocks is about 650 mb. World wheat ending stocks were projected to be 6.72 billion bushels (bb) compared to a five-year average of 5.91 bb. Essentially, no change from last month's estimate. In the May 9, 2011 WASDE report, the USDA will estimate wheat supply and demand for the 2011/12 marketing year.
The driving forces behind wheat prices is the drought in the south and west and wet field conditions in the north. Oklahoma's wheat condition was reported at 53 percent poor to very poor, 13 percent good and 3 percent excellent. Texas has the lowest crop report with 61 percent poor to very poor and 12 percent good, zero excellent. Oklahoma is projected to produce less than 90 mb compared to a five-year average of 109 mb. Texas is projected to produce less than 50 mb compared to a five -year average of 92 mb.
Soft red winter wheat crop conditions have improved. For the 18 winter wheat states, the average rating was 34 percent poor to very poor compared to 6 percent last year. Thirty-seven percent of the acres were rated good to excellent compared to 69 percent last year. The market will continue to watch the drought areas and the spring wheat planting in the wet northern area.
Wheat prices should remain relatively strong until sometime in July. Like last year after the U.S. wheat harvest is nearly complete, foreign wheat production will determine if the 2011/12 marketing year price trend is up or down. After the foreign harvest is complete in late September, the market will concentrate on Australia's and Argentina's wheat crops.