The 2009/10 U.S. wheat balance sheet is nearly unchanged this month. A 20-million-bushel increase in domestic soft red winter wheat use is offset by the same size reduction in hard red winter wheat as lower prices relative to corn encourage soft red winter wheat feeding. The 2009/10 marketing-year average farm price is projected at $4.70 to $5.50 per bushel, down 20 cents on the high end of the range. Larger world supplies are expected to keep substantial downward pressure on domestic wheat prices with seasonal post-harvest gains limited by the need to keep U.S. wheat competitive in the world market.

Global wheat supplies for 2009/10 are projected 3.9 million tons higher as a 0.5-million-ton decrease in world beginning stocks is more than offset by a 4.4-million-ton increase in foreign production. Wheat production is raised 2.2 million tons for EU-27 as higher reported production for France, Denmark, and a number of other countries, more than offset reductions for Germany and Poland. Production is raised 1.0 million tons for Russia on higher reported area. Production is raised 0.5 million tons each for Kazakhstan and Ukraine, and 0.3 million tons each for Belarus, Paraguay, and South Africa. Partly offsetting is a 0.5-million-ton reduction for Argentina as continued drought and unseasonable heat limited late seeding and further reduced yield prospects in the central and northern growing areas.

Global wheat imports and exports for 2009/10 are projected slightly lower. Small import reductions for Malaysia, Mexico, Sri Lanka, Venezuela, and Vietnam are partly offset by  increases for Algeria and Saudi Arabia. Exports are lowered 0.5 million tons for Argentina as the smaller expected crop reduces competition for U.S. wheat, especially in the Western Hemisphere. Global consumption is raised 0.9 million tons mostly reflecting a 0.5-million-ton increase in Ukraine feeding and a 0.5-million-ton increase in EU-27 food and industrial use. Other changes in projected food use are smaller and mostly offsetting. Global ending stocks for 2009/10 are projected at 186.6 million tons, up 3.0 million from last month and 64.0 million higher than the 28-year low in 2007/08.

Source: USDA/ERS