The U.S. Department of Agriculture (USDA) World Agricultural Supply and Demand Estimates (WASDE) report for April notes new influences in the global wheat market from a big jump in soft red winter (SRW) wheat plantings.

USDA lowered U.S. corn feed and residual use by 50 million bushels, partially due to increased prospects for 2011/12 SRW production. In its March 31 Prospective Plantings report, USDA indicated a 55 percent increase in SRW planted area compared to 2009/10, a marketing year when SRW harvested area was down about 30 percent below its five-year average.

The April WASDE noted that the weighted average of early April crop conditions in the SRW states (mainly east of the Mississippi River) shows the highest percent of SRW in good-to-excellent condition since 2006/07.

SRW conditions are good in Arkansas and North Carolina where wheat feeding is an alternative for poultry and hog producers. 

With high demand and very low corn stocks predicted, the cash and futures price spread between corn and SRW has narrowed significantly, creating additional opportunities for wheat to replace higher priced corn in domestic feeding rations.