March 12, 2010

US 2010 wheat carryover tops one billion bushels

The USDA projected higher 2010 US carryover stocks of wheat and corn but lower stocks of soy compared with February projections in its March 10 World Agricultural Supply and Demand Estimates report.

World 2010 carryover projections were raised from February for wheat, corn and soy.

The projected 2010 USDA carryover numbers for wheat and corn were above the average pre-report trade expectations, but the soy number was below the average trade estimate.

Projected carryover of US wheat on June 1, 2010, was one billion bushels, up 20 million from the February projection of 981 million bushels and up 344 million, or 52%, from 657 million bushels in 2009.

The increase in carryover was the result of a 20-million-bushel decrease in projected food use of wheat in 2009-10 based on mill grind data from the US Bureau of the Census, the USDA said. Food use of wheat was projected at 920 million bushels, down 20 million from 940 million bushels projected in February and seven million below 2008-09 use of 927 million bushels.

"High flour extraction rates for a second straight year are reducing the amount of grain needed to produce flour," the USDA said. "At the same time, declining per capita consumption is reducing demand for flour and wheat."

Other use projections were unchanged from February including seed use at 72 million bushels in 2009-10, feed and residual use at 170 million bushels and exports at 825 million bushels, which were down 190 million, or 19%, from one billion bushels last year.

Total domestic use was projected at 1.2 billion bushels, down 20 million from February and down 98 million, or 8%, from 1.3 billion bushels in 2008-09, and total wheat use at nearly two billion bushels, down 20 million from February and down 288 million, or 13%, from 2.3 billion bushels in 2008-09.

Carryover projections were adjusted from February for all wheat classes except durum, which was at 45 million bushels. Projected 2010 carryover of hard winter wheat was 420 million bushels, down one million from February, hard spring 277 million bushels, up five million, soft red 207 million bushels, up four million, and white wheat 52 million bushels, up 12 million.

The average farm price of all wheat was projected at US$4.80-US$5 a bushel in 2009-10 compared with US$4.75-US$4.95 in February, US$6.78 in 2008-09 and US$6.48 in 2007-08.

Global 2009-10 wheat production was projected at 678.01 million tonnes, up 570,000 tonnes from February but down 4.64 million tonnes from record large outturn of 682.65 million tonnes in 2008-09. Production in Argentina was forecast at 9.6 million tonnes, up 600,000 tonnes from February and from a year earlier.

World wheat ending stocks were projected at 196.77 million tonnes in 2009-10, up 910,000 tonnes from 195.86 million tonnes in February and up 31.2 million tonnes, or 19%, from 165.57 million tonnes in 2008-09.