USDA lowers wheat carryover to 670 million bushels

by World Grain Staff
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WASHINGTON, D.C., U.S. — The U.S. Department of Agriculture (USDA) on July 12 forecast the carryover of wheat in the United States on June 1, 2012, at 670 million bushels, down 17 million bushels from its June projection and down 191 million bushels, or 22%, from an upwardly revised 861 million bushels in 2011. The forecast contained in the July World Supply and Demand Estimates fell below the average of pre-report trade estimates at 702 million bushels.

The USDA raised its forecast of the 2011-12 U.S. wheat supply by 90 million bushels from its June projection. Forecast at 3.067 billion bushels, the supply in the current crop year would be 217 million bushels, or 7%, smaller than 3.284 billion bushels in 2010-11.

The increased supply forecast for this year reflected a 52-million-bushel increase in the estimated 2011-12 carry-in that resulted from the estimate of June 1 wheat stocks issued by the department on June 30. Also, the wheat production forecast for 2011 was raised 48 million bushels from the June outlook to 2.106 billion bushels, as higher winter wheat production and higher forecast yields for durum and other-spring wheat more than offset the lower wheat area as estimated in the June 30 acreage report. The wheat production forecast for 2011 was down 102 million bushels, or 5%, from the 2.208 billion bushels harvested last year.

U.S. wheat imports in 2011-12 were projected at 100 million bushels, down 10 million bushels from the June forecast and equal to the 100 million bushels imported in the previous year. The USDA attributed the lower import forecast to “lower expected supplies in Canada.”

Domestic use of wheat in the United States in 2011-12 was projected at 1.247 billion bushels, up 7 million bushels from the June forecast and up 110 million bushels, or 10%, from 1.137 billion bushels in 2010-11. The upward adjustment in domestic disappearance reflected an increase in forecast seed use of wheat in the current year to 82 million bushels. The USDA noted the seed use adjustment was required because late planting in the northern Plains shifted seed usage for the 2011 crop into the 2011-12 marketing year that began on June 1.

U.S. wheat exports in 2011-12 were projected at 1.150 billion bushels, up 100 million bushels from the June forecast but down 136 million bushels, or 11%, from 1.286 billion bushels in 2010-11. Exports last year were the largest since 1992-93.

Total wheat disappearance in the United States in 2011-12 was projected at 2.397 billion bushels, up 107 million bushels from the June forecast but down 26 million bushels from 2.423 billion bushels in 2010-11.

The 2011-12 season-average farm price for all wheat is projected at $6.60-$8 per bushel, down 40 cents on both ends of the range with the USDA linking the decline to the impact of a sharp drop in projected corn prices.
The July supply-and-demand estimates provided the year’s first wheat by-class breakdowns. The June 1, 2012, carryover of hard winter wheat was projected at 199 million bushels, down 187 million bushels, or 48%, from 386 million bushels in 2011. The hard spring wheat carryover was projected at 173 million bushels, down 12 million bushels from 2010. The soft red winter wheat carryover was projected at 183 million bushels, up 13 million bushels from 2010, and the white wheat carryover was forecast at 102 million bushels, up 17 million bushels from 2010. The durum carryover was projected at an anemic 14 million bushels, down 21 million bushels from 2010.

World wheat ending stocks for 2011-12 were projected at 182.19 million tonnes, down 2.07 million from June and down 7.78 million tonnes, or 4%, from 189.97 million tonnes estimated for 2010-11.

The U.S. corn carryover on Sept. 1, 2012, was projected at 870 million bushels, up 175 million bushels, or 25%, from the June forecast and down just 10 million bushels from 880 million bushels as the projection for the current year. The higher forecast carryover reflected higher carry-in stocks than earlier projected and a higher production forecast based on the harvested area projection in the June 30 acreage report. The USDA number for 2012 still was below the average trade expectation of 1.013 billion bushels. The 2011 projection also was below the average trade estimate at 911 million bushels.

The U.S. soybean carryover on Sept. 1, 2012, was projected at 175 million bushels, down 15 million bushels from the June forecast and down 25 million bushels, or 13%, from 200 million bushels as the forecast for the current year. The USDA 2011 and 2012 carryover numbers were near the levels expected by the trade.
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