U.S. and world wheat ending stocks decline

Farm and Ranch April 12, 2010 There was a small surprise for wheat in Friday’s USDA April supply and demand report. The estimate of U.S. wheat endings for this marketing year was reduced by 51 million bushels due to an increase in exports and feed and residual use.

The wheat carryover is still huge at 950 million bushels. By class USDA reduced ending stocks for hard red winter, hard red spring and durum, while white wheat carryout was unchanged at 52 million bushels and soft red stocks were increased a few million bushels.

The USDA also reduced its projection for world wheat ending stocks by one million metric tons from last month’s estimate. It has been a while since a decline in world stocks was forecast and Brian Hoops of Midwest Market Solutions in Yankton, South Dakota, comments.

Hoops: “We are still 30 million metric tons above where we were a year ago, so obviously we have been growing these wheat stocks for quite some time. It is nice to see there is a trend here that has been reversed. Maybe we are not increasing wheat stocks, we are going to start to decrease them. I think the trade will probably be really slow to jump on this as a major bullish event but if we can see next month world wheat stocks decrease as well then you may see the trade start to pay a little more attention to it.”

Hoops emphasizes it is a minimal adjustment, there is still a lot of wheat around, and the northern hemisphere harvest is just a month away.

In May USDA will issue its first estimate of U.S. winter wheat production.

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