World wheat crop gets bigger

Farm and Ranch September 14, 2009 In a report released Friday the USDA raised its estimate of world wheat production this year by over four million metric tons from its August forecast. That raised world wheat ending stocks by three million tons to nearly 187 million. And that is 64 million tons more than the 28 year low in 2007/2008.

USDA says the larger world supplies are expected to keep substantial downward pressure on domestic wheat prices with seasonal post-harvest gains limited by the need to keep U.S. wheat competitive in the world market.

The department took 20 cents off of the high end of its projected marketing year average farm price, which is now $4.70 to $5.50 a bushel.

Sterling Smith of Country Hedging says one thing wheat and the grains generally have going for them, is the lower dollar.

Smith: “The U.S. dollar continues to slide. As long as that continues to slide that will provide a backstop for these grains. It won‘t necessarily stop them from dropping severely but it will cushion the blow and keep the price movement on the downside more like a leaky tire rather than a spectacular crash.”

The USDA report showed the U.S. wheat carryout overall next May unchanged from last month at 743 million bushels though hard red winter ending stocks were raised 20 million bushels and soft red lowered 20 million on expectations of increased feeding. White wheat ending stocks remain at 53 million bushels, 11 million less that last year.

I’m Bob Hoff and that’s the Northwest Farm and Ranch Report on the Northwest Ag Information Network.