January 15, 2007

USDA raises US wheat end stocks forecast; sees less exports

The US Department of Agriculture Friday (Jan 12) raised its forecast for US wheat ending stocks and said it expects to see less US exports in the 2006/07 marketing year.

"Imports are raised 10 million bushels as hard red spring and durum wheat imports to date have been higher than expected," the USDA said in its January supply and demand report. "Exports are lowered 25 million bushels reflecting the slow pace of shipments and sales as a result of strong US prices."

The new USDA forecast for 2006/07 wheat ending stocks is 472 million bushels, up 34 million from the government's December forecast, but down from the 2005/06 level of 571 million.

The US is now expected to export less--a drop of 25 million bushels to just 875 million bushels--while there will be stronger imports, the USDA said. Importers are expected to bring in 115 million bushels, 10 million more that the USDA predicted a month ago.

The forecast for US wheat production was left unchanged at 1.812 billion bushels, but the USDA said Friday that global wheat production is higher than previously expected.

Stronger Russian wheat production is the primary reason for the stronger global production forecast, USDA said.

Global wheat production is now forecast at 590.75 million tonnes, up from the December prediction of 588.56 million tonnes. Russian production is seen at 44.9 million tonnes, up from 43.5 million tonnes.

Russia, Bulgaria and Romania are all exporting more wheat than expected, the USDA said, but that is more than offset by reduced exports expected from the US, the European Union, India and Ukraine. The USDA raised its forecast for global ending stocks by 1.09 million tonnes to 121.83 million tonnes.