USDA’s February 8thwheat supply and demand report was friendly in that it lowered U.S. ending stocks 25 million bushels.
USDA’s 2012/13 projections estimate ending stocks at 691million bushels, compared to the average pre-report guess of 728 million bushels and last month’s projection of 716 million bushels.
Feed/residual use was again increased, this time by 25 million bushels as wheat use increased in livestock and poultry rations.
The stock to use ratio was lowered 1.3 percent to 28.2 percent.
The projected season average price of $7.70 to $8.10 a bushel was raised 5 cents on the bottom side and raised 5 cents on the top end.
Global stocks are expected to decrease 3.3 million bushels from last month’s projection to 6.494 billion bushels.
May wheat closed down ½ cent at $7.62 ½ on Feb. 11. July wheat closed down ¾ cent to $7.62 ¾.
I am currently priced 10 percent on the 2013 crop.
Price outlook will depend on how the wheat crop in the Plains breaks dormancy. I would look for pricing opportunities this spring.
Over the past 31 years the average difference between the February projection for U.S. ending stocks and the final estimate has been 48 million bushels with 19 years below the final estimate and 12 years above.
These numbers can and will change, but do reflect the best information and estimates at the time of the report.
The next USDA Supply & Demand report will be released March 8, 2013.