May 15, 2006

USDA sees tight wheat ending stocks for 2006/07

The US Department of Agriculture, in its first 2006/07 forecast, predicted Friday (May 12) that there will be tight US wheat ending stocks of just 447 million bushels, down from the latest prediction of 547 million bushels for 2005/06.

The new USDA forecast, which also set lower production and export expectations for 2006/07, said ending stocks would be about 18 percent lower than the previous year. Analysts generally expected the move by USDA.

Wheat production for the 2006/07 marketing year will total just 1.873 billion bushels, down from 2.105 billion expected for 2005/06, the USDA said in its monthly supply and demand forecast.

The USDA also released Friday a new winter wheat 2006 forecast that shows a 12 percent drop in production "because of increased abandonment and reduced yields".

US wheat exports will fall by 100 million bushels in 2006/07, the USDA said its monthly supply and demand report. The USDA set the new forecast at 900 million bushels, down from its latest 1-billion-bushel prediction for 2005.06. USDA attributed the decrease primarily to "tight US supplies".