Wheat supplies remain burdensome

Farm and Ranch November 11, 2009 U.S. and world wheat stocks got bigger in USDA’s supply and demand report issued Tuesday. Although U.S. hard red spring wheat and durum production was trimmed from previous estimates, a reduction in export prospects of 25 million bushels helped boost projected U.S. ending stocks next May to 885 million bushels. Brian Hoops of Midwest Market Solutions says that is burdensome.

Hoops: “In fact this is the highest level of wheat stocks in the U.S. since the 2002 crop report when we had prices averaging in the 2.50 to $3 range. So you can see we are nearly double that price even though the ending stocks are at similar levels and the world stocks at 188 million tons is also going to be very burdensome. That is 20 million more than we had a year ago at this time. So it will take some time for the U.S. to work through these large wheat stocks.”

White wheat ending stocks are up ten million bushels from a month ago to 52 million. Last year’s carryover was 64 million bushels.

USDA’s projected marketing-year average farm price for wheat was narrowed ten cents on both ends of the range to $4.65 to $5.05 a bushel. The department says recent gains in futures prices have supported farm gate prices while limiting export opportunities for U.S. wheat.

U.S. corn production this year now forecast at 12.9 billion bushels, down one percent from last month but seven percent higher than 2008.

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