What is in this article?:
• Prices appear stable as the price ratio of corn and wheat is returning to a traditional relationship.
• Fundamentals are not bullish going into planting for 2012.
• However, concern for global exports and moisture for winter seeding in the U.S. are supporting prices.
Overall yield is up
The overall yield for wheat is up in 2012 at 46.5 bushels even with a decline in soft red winter wheat of 5 percent to 60.5 bushels per acre.
For Georgia, planted acres were up 30,000 to 280,000 with 200,000 estimated harvested for a 44 bushel average yield. The trend yield for 2012 would be 51 bushels per acre. Georgia typically harvests 65 percent of wheat plantings for grain.
Total production of soft red winter is projected to fall short of use shrinking ending stocks to 159 million bushels.
Total supply including beginning stocks of 185 million bushels from 2012 starts out at 660 million bushels, same as last year.
Total use is projected to increase 5 percent from 475 million in 2011/12 to 500 million in 2012/13.
Domestic use and feed and residual use are projected to remain the same at 311 million and 140 million bushels respectively.
Growth in exports by 25 million will push total use up.
High corn prices don’t appear to have pushed feed use higher than the previous year unless estimates are revised later in grain stocks report.
World wheat production is projected down over last year by 5 percent or 36 million metric tons to 659 million.
Major wheat exporting countries have experienced shortfalls leading to a drop in the export trade. Export trade is expected to fall to 135 million metric tons with the U.S. capturing some of the market share as a result.
The Former Soviet Union production is down according the USDA by 4.0 million tons with lower reported area and reduced yields due to additional drought and heat damage at harvest for both winter and spring wheat crops in the FSU.
In addition to the FSU, Argentina (-23 percent), Australia (-12 percent), and the EU-27 (-3.3 percent) are having short production years. The FSU, Australia and EU-27 are the largest exporters of the ones experiencing production problems.
As a result of reduced supplies global wheat consumption for 2012/13 is lowered 14 million tons to 680 million. Imports are reduced12 million tons to 135 million.