A billion bushel U.S. wheat carryout

Farm and Ranch March 11, 2010 Already burdensome U.S. and world wheat supplies grew larger in the USDA’s March supply and demand report issued Wednesday. The government raised its projection of U.S. wheat carryover stocks for the current marketing year by 20 million bushels compared to last month, bringing total ending stocks to just over one billion bushels.

USDA lowered projected food use 20 million bushels as high flour extraction rates for a second straight year are reducing the amount of grain needed to produce flour. The department also says declining per capita consumption is reducing demand for flour and wheat.

World wheat ending stocks were also raised about one million tons.

The wheat numbers confirm what analysts like Mike Krueger of the Money Farm have been saying.

Krueger: “And at least in the last couple of months I tell wheat producers there is no fundamental reason for wheat to go up. I can‘t give you two reasons today why wheat should go up.”

Krueger made those remarks last week when he also said use extreme market moves to price production or cover existing sales.

USDA’s increase in ending stocks affected all wheat classes except durum. White wheat carryout for 2009-2010 increased 12 million bushels from last month to 52 million. That compares to last year’s ending stocks of 64 million bushels.

USDA also increased U.S. corn carryout by 80 million bushels on reduced export expectations.