According to the USDA's May 11 World Agricultural Supply and Demand Estimates report, the 2011/12 outlook for U.S. wheat is for reduced supplies with lower carryin and production than in 2010/11. Beginning stocks for 2011/12 are down 14 percent from 2010/11, but remain the second highest in a decade. All-wheat production is projected at 2,043 million bushels, down 7 percent from 2010/11. The survey-based forecast of winter wheat production is down 4 percent, as lower expected harvested area and yields in Colorado, Kansas, Oklahoma, and Texas sharply reduce Hard Red Winter (HRW) wheat production. Partly offsetting is higher production of Soft Red Winter (SRW) wheat with a rebound in area and higher forecast yields. Spring wheat production is expected lower despite higher expected planted area for other spring wheat. A return to trend yields from record levels of the previous 2 years is expected to reduce durum and other spring wheat production. U.S. wheat supplies for 2011/12 are projected at 2,992 million bushels, down 9 percent from 2010/11.

Total U.S. wheat use for 2011/12 is projected down 7 percent as lower projected exports more than offset higher expected domestic use. Food use is projected at 945 million bushels, up 15 million from 2010/11 as flour extraction rates are expected to decline modestly from their historical highs during the past 3 years and consumption grows slightly driven by slowly rising population. Feed and residual use is projected at 220 million bushels, up 50 million from the 2010/11 projection as higher corn prices and a rebound in SRW production encourage more summer quarter wheat feeding.

U.S. exports are projected at 1,050 million bushels, down 225 million from the 2010/11 projection. Export prospects are sharply diminished with reduced HRW production and increasing competition as Black Sea production and exports are projected to rebound. U.S. ending stocks are expected to continue their decline from the recent high in 2009/10. At a projected 702 million bushels, 2011/12 ending stocks are expected down 137 million from 2010/11 and 274 million below 2009/10. The season-average farm price for all wheat is projected at a record $6.80 to $8.20 per bushel, compared with $5.65 for 2010/11.

Global wheat supplies for 2011/12 are projected 1 percent higher as a projected 25.9-million-ton increase in foreign production more than offsets lower beginning stocks and the drop in U.S. production. At the projected 669.6 million tons, global production for 2011/12 would be up 21.4 million from 2010/11. A sharp rebound in FSU-12 production, combined with larger expected crops in India, North Africa, Canada, and EU-27 account for most of the increase in world wheat output for 2011/12.

Global wheat trade is expected higher in 2011/12 with world exports projected up 2 percent to 127.3 million tons. Increased supplies in Russia, Ukraine, and Kazakhstan and a return to exporting are expected to increase competition for EU-27 and U.S. wheat. A recovery in production and improved wheat quality in Canada is also expected to increase export competition. Global wheat consumption is projected up 8.4 million tons or 1 percent with increased feeding and food use expected in 2011/12. Global ending stocks for 2011/12 are projected slightly lower on the year at 181.3 million tons, compared with 182.2 million for 2010/11.