Analysts expect USDA to further reduce world wheat production estimates in future reports

Farm and Ranch July 13, 2010 Although the USDA raised its estimate of U.S. wheat production and ending stocks in reports issued last week it also reduced its forecast for world wheat production and carryover. Some analysts, like Al Kluis of Kluis Commodities in Minneapolis think we’ll see more reductions in the world numbers in future reports. Canada is an example.

Kluis: “The USDA coming in with 20.5 million metric tons on their wheat crop. Certainly larger than I think it is. Most people are looking at the Canadian wheat crop at being 18 million metric tons. So that is one of the key things we will have to trade and analyze.”

A Canadian crop that gets smaller would of course be good news for U.S. hard red spring wheat growers.

Kluis: “With the a big drop in the wheat available out of Canada it really puts the U.S. spring wheat producer in a good position, especially if we end up with a good high quality crop.”

There are other countries that could see further reductions in production.

Kluis: “Certainly when you look at some of the problem areas that have developed in European wheat production. Wheat production problems in Russia, Kazakhstan.”

Currently USDA has Russia, Kazakhstan and the Ukraine exporting a total of 31 million metric tons this marketing year, about three million less than last year.

Some analysts say the USDA’s 18 million metric ton reduction in world wheat production this year from 2009 has to be more than doubled to create a long term bullish market.

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

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