Higher wheat production more than offset by increased exports
Projected U.S. wheat supplies for 2013/14 are raised slightly this month, with lower beginning stocks more than offset by higher production, both based on the latest survey-based estimates and forecasts. Beginning stocks are reduced 27 million bushels as indicated by the June 1 stocks estimate reported in the June 28 Grain Stocks report. Production is forecast up 34 million bushels with lower forecast harvested area from the June 28 Acreage report more than offset by higher yields. Production is raised 11 million bushels for hard red winter and 30 million bushels for soft red winter (SRW) wheat. White winter wheat is forecast down 7 million bushels. For durum, a reduction in area is only partly offset by a higher yield with production forecast down 5 million bushels. For other spring wheat, a reduction in area is more than offset by a higher yield forecast in today’s Crop Production report, adding 4 million bushels to this month’s production forecast. July survey-based yield forecasts for durum and other spring wheat are up 1.6 bushels per acre from last month’s trend-based projections.
Total U.S. wheat use for 2013/14 is raised 89 million bushels as lower expected domestic use is more than offset by higher projected exports. Projected feed and residual disappearance is lowered 10 million bushels with stronger export demand, especially for SRW wheat. Exports are projected 100 million bushels higher reflecting strong sales, particularly to China. Ending stocks are projected down 83 million bushels. At 576 million tons, stocks are expected to remain well above the 60-year low of 306 million tons in 2007/08. The projected range for the 2013/14 seas on-average farm price is raised 20 cents on both ends to $6.45 to $7.75 per bushel. At the $7.10-per-bushel midpoint, this would be down from the record $7.77 per bushel reported for 2012/13.
U. S. wheat exports for the July-June world trade year are projected higher by 3.0 million tons to 29.5 million this month. There are two main reasons for the increase: 1) revisions to the Chinese supply and demand balances for both 2012/13 and 2013/14. These changes reflect an expansion in projected Chinese wheat demand, which is expected to give a boost to U.S wheat exports, and is also behind most of this month’s important changes in foreign stocks, wheat use, and exports. 2) an expected interruption of wheat exports from Argentina, which gives the U.S. an opportunity to partly displace Argentine supplies in South America. Global wheat production is up marginally this month, while a projected increase in wheat use drives ending stocks down.
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