USDA lowers wheat price outlook; world stocks at 10-year high

Farm and Ranch October 13, 2011 USDA raised its estimate for 2011-12 U.S. wheat ending stocks by 76 million bushels in its report Wednesday as lower expected domestic use and exports more than offset reduced spring wheat production. White wheat ending stocks climbed to 111 million bushels, 26 million more than this past year.

USDA said that despite competitive wheat prices relative to corn for feeders in many areas, wheat feed and residual use during June to August was indicated at 53 million bushels lower than the same quarter last year. Export prospects are reduced on competition from Australia and Russia.

Then there is the global wheat situation and Bill Tierney with AgResources Company told a CME post-report briefing;

Tierney: “In the world market for wheat we again continue to see world wheat production up. They increased it approximately three million metric tons. That is up 33 million metric tons from a year ago.”

And USDA raised global wheat ending stocks for the marketing year to 202 million metric tons which it says would be a ten-year high.

This all prompted USDA to lower its season average wheat price forecast to $7.50 a bushel, down 35 cents from last month‘s projection.

I’m Bob Hoff and that’s the Northwest Farm and Ranch Report on Northwest Aginfo Net.

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