Some of the numbers seem to be heading in the right direction, but that may not be enough to help pull wheat prices out of the doldrums in the near future.
USDA estimates that 2001 U.S. wheat production will be down 231 million bushels from 2000's 2.22 billion, and world wheat production could be down 7.98 million metric tons from 579.1 million metric tons in 2000/01.
Following the fourth straight year of a decline in production, U.S. wheat stocks are projected to fall by 241 million bushels and world wheat stocks by 23.99 million metric tons from the 2000/01 marketing year (July-June).
Even so, U.S wheat prices are not expected to climb much above the $3 per bushel level in 2001/02, according to Kurt Guidry, Extension economist with the LSU AgCenter in Baton Rouge, La. Guidry spoke at the Southern Region Agricultural Outlook Conference in Atlanta.
“As with corn, the demand for wheat continues to be where we are having problems in getting prices up,” he said. “Wheat prices have not responded to lower acres or declining stocks.”
Exports continue to stagnate, he said. USDA is forecasting a decline in U.S. wheat exports of 11 million bushels compared to the 2000/01 marketing year. Food use is also not expected to improve and feed use could fall by nearly 70 million bushels in 2001/02.
“Global wheat trade is expected to rebound after a poor showing in 2000/01, but we're still having problems moving our wheat into the world market,” Guidry noted.
U.S. wheat stocks are forecast to decline from 873 million to 632 million bushels in 2001/02, dropping the stocks-to-use ratio to just above 25 percent. That compares to a level of about 15 percent when wheat prices spiked above $5 per bushel in 1995.
World wheat production is also trending down. USDA estimates total 2001/02 world production at 571.07 million metric tons, down 7.98 million from 2000/01.
The major wheat producing countries or blocks — Argentina, Australia, Canada and the European Union — are all expected to decrease production in the face of declining prices.
World ending stocks are expected to decline from 158.5 million metric tons to 134.5 million, dropping the world stocks-to-use ratio below 20 percent for the first time since 1998/99. The United States will hold about 13 percent of those stocks.