U.S. wheat ending stocks for 2009/10 are projected 36 million bushels higher this month, as higher forecast production more than offsets an increase in projected use and lower imports, according to today's World Agricultural Supply and Demand Estimates report.

Wheat production is forecast 71 million bushels higher with increases in all classes of wheat except soft red winter. The largest increases are for hard red spring wheat and durum reflecting sharply higher expected yields in the Northern Plains. Feed and residual use is raised 5 million bushels with the larger crop. Exports are projected 25 million bushels higher with reduced production prospects in Canada and Argentina, which are major competitors in the western hemisphere wheat market. The 2009/10 marketing-year average farm price is projected at $4.70 to $5.70 per bushel, down 10 cents on both ends of the range. Small revisions are also made this month to 2007/08 and 2008/09 imports, exports, and food use based on the latest trade and mill grind data from the U.S. Bureau of Census.

Global wheat supplies for 2009/10 are projected 5.0 million tons higher with higher beginning stocks and increased prospects for global production. World wheat production is raised 2.8 million tons for 2009/10 with major increases for India, United States, EU-27, China, and Ukraine partly offset by reductions for Russia, Argentina, Canada, and Kazakhstan. India production is raised 3.0 million tons to a record 80.6 million based on the latest revision to the official government estimate. EU-27 production is raised 1.6 million tons mostly on higher reported yields for Germany, but also on better-than-expected yields for France and rising prospects for harvested area and yields for Poland. Partly offsetting are cuts for Spain, Romania, Bulgaria, and Austria where persistent dryness reduced yields. China production is raised 1.0 million tons reflecting the first official indications for the harvested summer crops. Ukraine production is raised 1.0 million tons on higher winter wheat area and harvest reports.

Production forecasts for 2009/10 are lowered for several major wheat exporting countries. Production for Russia is lowered 4.5 million tons as dryness and extended heat during July sharply reduced yields in the Southern and Volga Districts. Kazakhstan production is lowered 0.5 million tons as western growing areas suffered under weather conditions similar to those in Russia. Argentina production is lowered 1.0 million tons as continued dryness in the central and western growing areas limited plantings. Production is also lowered 1.0 million tons for Canada as July rains came too late in some areas of Alberta and Saskatchewan and crop development remains delayed raising the potential for late season frost damage.

Global wheat imports and exports for 2009/10 are projected slightly lower. Small import reductions are projected for Afghanistan, Brazil, Egypt, Japan, and Azerbaijan. Partly offsetting is an increase for Sudan. Larger country changes are forecast for exports, but they are mostly offsetting, leaving global exports down just 0.6 million tons. Exports are lowered 2.0 million tons for Russia, 1.8 million tons for India, 1.0 million tons for Argentina, and 0.5 million for Kazakhstan. Exports are raised 2.0 million tons each for EU-27 and Ukraine and combine with higher expected U.S. exports to limit the decline in global trade. Global consumption is raised 2.7 million tons as a 4.4-million-ton increase in India food use is only partly offset by reductions in food use by Ukraine and Canada, and lower wheat feeding in EU-27 and Canada. Global ending stocks for 2009/10 are projected 2.3 million tons higher boosted in part by the rise in 2008/09 carryout.

SOURCE: Cattle Network.