IGC estimates world wheat use for 2011/12 at 679 MMT, a 2.0 MMT increase attributed almost entirely to increased feed wheat use. Large global supplies of low and medium quality wheat, combined with higher than average corn prices, have caused many livestock producers to switch from corn, a traditional feed grain, to wheat.

Estimated feed use is 126 MMT this year, up 9 percent from last year and just below a record 130 MMT in 1990/91. China’s estimated feed wheat use is the single largest increase of any country, up 27 percent this year to 16.5 MMT.

The re-emergence of Black Sea supplies has heated up export competition this year.

World exports are up 9.0 MMT this year to 135 MMT, an upward revision of 2.2 MMT since last month and the second highest of all time. IGC projects Russia will export 20.0 MMT after exporting just 4.0 MMT last year. IGC expects Ukraine to more than double last year’s exports of 4.0 MMT with 9.0 MMT this year, while it expects Kazakhstan to export 8.0 MMT, up from 5.6 MMT last year.

IGC says Black Sea exporters will pick up much of the sales they forfeited to the United States and European Union (EU) last year.

IGC projects U.S. exports for the year down 25 percent to 26.5 MMT (roughly equal to the five-year average for U.S. wheat exports) and EU exports down 23 percent to 18.6 MMT.

Looking forward to next year, IGC expects 2012/13 carryover stocks to reach 200 MMT, a 10-year high. That is up 5.0 MMT from a year ago but down slightly from last month’s estimate of 202 MMT.

Winter wheat seeding in the northern hemisphere is nearly complete with total planted area projected to rise 1.6 percent to 225 million hectares.

While conditions are good in the European Union, Russia and parts of the United States, concerns remain about the ongoing drought in the U.S. southern plains, dry conditions in Ukraine and too much rain in Australia.