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US Wheat: Supplies Up, Prices Down

17 May 2012

US - The 2012/13 outlook for US wheat is for larger supplies and use, but lower prices. All wheat production is projected at 2,245 million bushels, up 12 per cent from last year’s weather-reduced crop and the highest since 2008/09. The all wheat yield, projected at 45.7 bushels per acre, is up 2.0 bushels from last year, but 0.6 bushels below the 2010/11 level.

The survey-based forecast for 2012/13 winter wheat production is up 13 per cent with a forecast yield of 47.6 bushels per acre as a recovery in yields in the southern and central Plains boost hard red winter (HRW) wheat production sharply from the previous year. Partly offsetting is lower forecast production for soft red winter (SRW) wheat and white wheat compared with last year. Spring wheat production for 2012/13 is expected to rebound with a recovery in durum area and higher projected yields for other spring wheat, which are expected to offset the decline in other spring area. US wheat supplies for 2012/13 are projected at 3,133 million bushels, up 5 per cent from 2011/12.

Total US wheat use for 2012/13 is projected up 8 per cent year-to-year on higher expected domestic use and exports. Food use is projected at 945 million bushels, up 15 million from 2011/12 as flour extraction rates are expected to decline modestly from historical highs in recent years and consumption grows with population. Feed and residual use is projected at 230 million bushels, up 50 million from the 2011/12 projection as favorable wheat prices relative to corn and larger HRW supplies boost summer quarter wheat feed and residual disappearance.

US exports for 2012/13 are projected at 1,150 million bushels, up 125 million from this month’s 25-million bushel higher projection for 2011/12. Larger supplies, more competitive prices, and an early expected start to this year’s harvest open the door to higher demand for US wheat during the coming months. US ending stocks are projected to continue their decline from the recent high in 2009/10. At a projected 735 million bushels, 2012/13 ending stocks are expected down 33 million from 2011/12 and 241 million below 2009/10. The season-average farm price for all wheat is projected at $5.50 to $6.70 per bushel, down sharply from the record $7.25 per bushel projected for 2011/12.

World wheat production is expected to decline almost 3 per cent in 2012/13, partly because the previous year’s exceptional yields across most of the countries of the former Soviet Union (FSU- 12) and Australia are not expected to be matched, and European Union (EU-27) yields are expected to be below trend. Foreign wheat production is projected down 24 million tons to 616 million because of reduced prospects in the EU-27, FSU-12, Australia, Argentina, Morocco, and some others. World wheat trade in 2012/13 (July-June) is expected to decline 7.7 million tons to 137.4 million due to a drop in demand for feed-quality wheat throughout the world. US wheat exports are expected to rise 14.5 per cent to 31.5 million tons because of high supply and lower competition.

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May 2012

TheCropSite News Desk

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