July 13, 2004

USDA Lowers Wheat Crop Forecast Slightly To 2.059 Billion Bushels

The U.S. Department of Agriculture, in its supply and demand report, lowered its forecast Monday for 2004-05 wheat production to 2.059 billion bushels, down slightly from 2.061 billion bushels a month ago. The new 2004-05 prediction is sharper decline from year-ago production of 2.337 billion bushels.
 
While market analysts did not expect the USDA's Monday forecast to surpass last year's production, most predicted it to be stronger than the department's June forecast.
 
The USDA, in the supply and demand report, said, "Forecast winter wheat production is 61 million bushels below last month due to lower yields. The first survey-based spring wheat (including durum) production forecast is up from last month's projection due to larger planted area estimates in the June 30 acreage report and a higher yield."
 
The forecast for winter wheat production, according to USDA's monthly crop report which was also released Monday, was lowered to 1.47 billion bushels, a 4% drop from last month and 14% below last year. The new yield forecast is 42.2 bushels per acre, down 1.4 bushels from USDA's June report.
 
Despite the new decreases announced for the U.S., world wheat production is seen higher in the USDA's July supply and demand report. Total non-U.S. production is forecast at 541.96 million metric tons, 4.61 million tons more than was expected a month ago.
 
The European Union, China and Russia were some of the countries that the USDA raised production forecasts for this month. China is now expected to produce 87 million tons of wheat, up 2 million tons from June. The 25 E.U. nations are seen producing 128.43 million tons, up from 127.5 million and the forecast for Russia was raised by 500,000 tons to 42.5 million.
 
World wheat production is up, but so are ending stocks, according to the USDA report. The report said, "This would be the first year-to-year increase in ending stocks since 1999-2000."
 
The USDA raised world wheat ending stocks in its July report to 132.24 million tons, up from 126.43 million tons a month ago.
 

Source: USDA