U.S. and world wheat stocks higher but so is price outlook

Farm and Ranch September 13, 2011 USDA’s September supply and demand report for wheat issued Monday forecast an increase of 90 million bushels in U.S. wheat ending stocks next May and a boost in world carryover as well, to the second highest level in the past decade. U.S. white wheat ending stocks are now pegged at 106 million bushels for the end of marketing year 2011-12, up ten million from last month and 21 million bushels more than this past year.

USDA reduced its forecast for U.S. wheat exports and food use but upped imports based on Canada’s wheat crop.

Even as U.S. and world wheat supplies are increasing, USDA raised its forecast for the national average price for wheat. Department chief economist Joe Glauber says that’s because of the impact from corn.

Glauber: “Really one of the big stories has been that the corn price is so high now it is lending a lot of support to the wheat price. We are looking at a mid-point for the wheat price for 2011-2012 of $7.85 a bushel.”

USDA’s September forecast for U.S. corn production is 12.5 billion bushels, down three percent from the August estimate and fractionally higher than 2010. If realized this would still be the third largest corn crop on record but the stocks-to-use ratio is down to 5.3 percent with the mid-range of the corn price forecast now at $7 a bushel.

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