February 25, 2008

US wheat stocks to near-double for 2008-09

A combination of increased supplies and lower use in 2008-09 are expected to boost US wheat ending stocks, the USDA said Friday in its grains and oilseeds outlook.

Ending stocks are pegged at 538 million bushels, near levels seen from 2003-04 through 2005-06, the USDA said. That is up nearly 93 percent from 272 million in 2007-08.

The 2008-09 balance sheet indicates "a reversal from the current market tightness" in wheat, the USDA said. The projected US wheat stocks-to-use ratio will more than double to 25 percent in 2008-09, according to the report.

Production problems in the US Plains and strong demand for US wheat drained ending stocks in 2007-08. Poor weather last year hit countries that are traditionally major wheat exporters, which sent more buyers to the US

But US wheat exports in 2008-09 are expected to decline 21 percent to 950 million bushels amid intense competition for sales, the USDA said. High prices at planting encouraged expanded winter wheat seedings across Europe and the former Soviet Union, and production in Australia is expected to rebound after two years of drought.