Foreign wheat beginning stocks for 2011/12 are forecast down 10.3 million tons to 159.4 million. This stocks decline partly offsets the projected 25.9-million-ton increase in production, and foreign wheat supplies are up 15.7 million tons year-to-year. The largest decline in beginning stocks comes from Russia and Kazakhstan, down an aggregate 8.4 million tons, where record drought depleted 2010/11 wheat supplies. Some of the countries with tighter year-to-year beginning stocks for 2011/12 are the traditional major exporters: the United States, EU-27, and Canada. EU-27 beginning stocks are projected down 4.2 million tons to only 11.7 million, with high world prices encouraging large exports despite comparatively low 2010/11 wheat output.

Canadian wheat beginning stocks are down 1.6 million tons to 6.2 million, following extremely wet conditions in the Canadian prairies resulting in lower 201/11 wheat output. Partly offsetting are higher beginning stocks in Australia and Argentina.

Foreign wheat use in 2011/12 is projected to increase just a bit more than 1 percent, or by 7 million tons to 636.7 million. Foreign wheat feed and residual use is virtually unchanged at 118.2 million tons, though there are several offsetting changes. In a number of countries with a tradition of wheat feeding, record-high corn prices are expected to encourage wheat feeding.

These countries include the EU-27, China, North African countries, India, Ukraine, and Kazakhstan, as well as a number of smaller-producing countries. The largest drop in wheat feed and residual use is for Russia, down 3.5 million tons is, as the country shifts back to its traditional proportions of coarse grain feeding, by increasing the feed shares of barley and corn.

This is after an exceptional 2010/11 year of big grain shortages, to which the government reacted by selling/distributing feed wheat from its intervention stocks to livestock producers, who substituted wheat for barley and corn in animals’ rations. Feed use is projected to be lower in Canada and Australia, in expectation that the quality of the 2011/12’s wheat crop in the countries will improve. Foreign food, seed, and industrial use of wheat is expected to increase in most countries around the world, by a total of about 1 percent in 2011/12.

The increase in foreign wheat use is projected to be smaller than the increase in wheat supplies, increasing foreign stocks at the end of 2011/12 to 162.1 million tons, up 2 percent. Alternatively, world wheat ending stocks are projected slightly lower falling less than 1 percent with the expected decline in U.S. stocks.