June 11, 2009

The US Department of Agriculture on Wednesday (June 10) lowered its forecast for US winter wheat production to 1.49 billion bushels, pushing total 2009-10 marketing year wheat supplies down to 2.8 billion bushels, a 10-million-bushel drop from last month's forecast.

The new winter wheat forecast is "down less than 1 percent from the May 1 forecast and 20 percent below 2008," the USDA said in its Crop Production report. "Based on June 1 conditions the US yield is forecast at 43.9 bushels per acre, down 0.3 bushels from last month and 3.3 bushels less than last year."

Separately, in its monthly World Agricultural Supply and Demand Estimates report, the USDA lowered the total US wheat production forecast for the 2009-10 marketing year to 2.016 billion bushels, down from last month's forecast of 2.026 billion bushels.

Lower-than-expected domestic wheat use, though, "more than offsets the decrease in production," the USDA said in the supply and demand report. "Feed and residual use is lowered 20 million bushels based on higher projected prices which are expected to limit the competitiveness of all but the lowest quality wheat in feed ration."

Consequently, the USDA raised its 2009-10 total wheat ending stocks forecast to 647 million bushels, up from the May forecast of 637 million.