September 29, 2004

 

 

First-Quarter US Wheat Stocks Seen Down On The Year

 

US Sept. 1 wheat stocks are seen coming in at 1.874 billion bushels. This is down from 2.039 billion for the same quarter last year.

 

The range in trade estimates varied from 1.800 billion bushels to 1.934 billion.

 

The US Department of Agriculture is scheduled to release its Sept. 1 quarterly grain stocks report and annual small grains summary Thursday at 0730 CT (1230 GMT). The US wheat marketing year runs June-July.

 

"First-quarter implied wheat feeding is always interesting to see," said Dan Cekander of Fimat Futures in Chicago while pointing out that it sets the tone for how feed usage will pan out over the rest of the year.

 

Cekander is looking for first quarter US wheat stocks of 1.896 billion bushels. On the year Cekander estimates feed usage to be 25 million bushels higher than the current USDA estimate of 200 million. He expects that the USDA will need to revise up its feed-usage figure due to the higher amount of lower-quality wheat in the US this year over most of the major wheat classes.

 

A variance in analysts' quarterly stock estimates was seen through differing crop-production estimates, as the USDA is also expected to update its wheat-crop projection last issued in the August crop report.

 

The average analyst estimate put the all-US 2004 wheat crop at 2.105 billion bushels, down from the August USDA forecast of 2.123 billion and the 2003 crop of 2.337 billion.

 

The trade estimates gathered ranged from 2.074 billion to 2.135 billion.

 

The bulk of this decline was expected to come from the spring wheat crop, which endured a lengthy damp and cool harvest, with a sizeable portion still left in the field going into the report.

 

The average analyst guess looks for the other-spring-wheat crop to total 526 million bushels, down from the August estimate of 545 million and the 2003 crop of 533 million.

 

Currently the USDA estimates other-spring-wheat yield at 41.2 bushels per acre, up from 39.7 bushels in 2003. The current 2004 yield forecast is the second largest on record, short only to the record yield produced in 1992.

 

Talk this year around the industry has also been that spring wheat acreage may have been lower than what the USDA currently figures, following planting problems due to overly wet conditions in parts of northern North Dakota.

 

Meanwhile, most analysts showed a slight bias for steady to slightly higher winter wheat output. The average trade estimate came in at 1.493 billion, up from the current USDA projection of 1.489 billion.

 

Dale Gustafson of Citigroup in Chicago looks for the US winter wheat crop of 1.527 billion bushels. He cites the improved crop ratings late in the season that suggested higher yields and anecdotal reports of better-than-expected yields this season out of the Pacific Northwest.