The total increase in export expectations from Russia, Kazakhstan, and Ukraine is 391 million bushels.

Since May, Australia’s expected wheat production has increased from 900 million bushels to the record 955 million bushels. Australia’s export projections increased from 551 million bushels to 698 million bushels, a 147 million bushel increase.

In the May USDA WASDE report, 2011/12 U.S. wheat marketing year ending stocks were projected to be 686 million bushels. In the November WASDE, U.S. wheat ending stocks were projected to be 828 million bushels.

In May, the average 2011/12 wheat marketing year price was projected to be $7.70. In November, the average annual price was projected to be $7.40.

On May 11, 2011, Oklahoma and Texas Panhandle wheat could be forward contracted, depending on location, for harvest delivery for $8.10 to $8.40. At this writing, cash wheat prices are between $6.16 and $6.60. Wheat may be forward contracted for June 2012 delivery for $6 to $6.40.

World 2011/12 wheat ending stocks are projected to be 7.44 billion bushels compared to a five-year average of 6.56 billion bushels. Allendale Inc. describes the wheat stocks situation as “comfortable.” With comfortable stocks, wheat prices are expected to trade sideways to lower.

Some analysts predict that U.S. 2012 wheat planted acres will be four million acres higher than in 2011. Relatively high world wheat prices are also expected to cause an increase in world wheat planted acres.

Barring weather problems, 2012/13 marketing year world wheat production will be greater than 2012/13 use. World wheat ending stocks are expected to increase and export competition will continue. With this scenario, wheat prices will continue to work lower.

The FSU and other exporting countries are expected to continue to sell wheat under world market prices. United States wheat stocks are expected to increase, and U.S. wheat prices are expected to trend lower.

The advantage the United States has is the ability to consistently deliver a high-quality milling wheat. Thus, it is important that wheat producers continue to produce a low dockage/foreign material wheat with good protein.

As prices trend lower, now is not the time to scrimp on inputs. A quality product is essential to maintaining the U.S. export market and price.