08/13/08 USDA lowers wheat price forecast

Farm and Ranch August 13, 2008 Slightly larger U.S. wheat production than expected a month ago combined with reduced prospects for feed use of wheat had USDA increasing U.S. wheat ending stocks next May by 37 million bushels in its August supply and demand report. That resulted in a 25 cent reduction on each end of the range for USDA's all wheat season average price, which is now projected at from $6.50 to $8 a bushel for the current marketing year. Compared to July the USDA is forecasting larger hard red winter and soft red winter crops but smaller white wheat, hard red spring and durum production. Total U.S. wheat production is expected to be up 19 percent from 2007. World wheat production is projected at a record 670 million metric tons, an increase from last month, and over 60 million tons more than last year. Alan Kluis of Kluisnews/Northland Commodities in Minnesota says there is no way wheat is going back to 13 or 20 dollars a bushel but he does see upward potential from current levels. Kluis: "Looking at the deferred contracts, Chicago trading around $8.15 and Minneapolis around $8.83 I think there is potential for at least $1 a bushel appreciation by this fall. We are going to need to see wheat a good crop this year but a good crop next year to keep prices down at this current level." Despite this past springs flooding USDA is projecting the second largest U.S. corn crop ever totaling 12.3 billion bushels. I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.