The wheat market has had a bullish reaction to USDA’s wheat supply and demand report that lowered U.S. ending stocks 38 million bushels.

USDA 2012/13 projections estimate ending stocks at 716 million bushels compared to the average pre-report guess of 743 million bushels and last month’s projection of 754 million bushels.

Based on the Grain Stocks report, feed/residual use was increased 35 million bushels. Seed use was also raised 2 million bushels.

The stocks to use ratio was lowered 2.1 percent to 29.5 percent.

The projected season average price of $7.65 to $8.15 a bushel was lowered 5 cents on the bottom side and lowered 15 cents on the top end.

Global stocks are expected to decrease 11 million bushels from last month’s projection to 6.490 billion bushels.

March wheat closed Jan. 11 up 10 ¼ cents at $7.54 ¾. July wheat closed up 6 ¾ cents to $7.67 with support at $7.34 and resistance at $8.03. There currently is a strong sell bias

You can check current commodity prices now.

Winter wheat seedings were 800,000 acres less than expected at 41.8 million acres. This compares to last year’s seedings of 41.3 million acres.

I am currently priced 10 percent on the 2013 crop.

Over the past 31 years the average difference between the January projection for U.S. ending stocks and the final estimate has been 59 million bushels with 18 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 Feb. 8, 2013.

(You can see Chuck Danehower’s comments on the soybean report at USDA January report neutral for soybeans. Cotton comments can be found here and his thoughts on the corn report are available here).