New-Crop Wheat Ending Stocks to Fall; Prices to Rise

Early projections from the USDA suggest wheat growers will be able to look forward to slightly better prices in 2021-22 as ending stocks fall to the lowest since 2013-14.

New-crop supply-demand estimates released Friday at the USDA’s annual Agricultural Outlook Forum put the season-average farm price at US$5.50/bu, up 50 cents from the forecast for the current marketing year.

On the supply side, the USDA said new-crop US wheat production will be almost unchanged from last year at 1.827 billion bu as higher area offsets a lower yield. Total all wheat planted area for 2021 is projected at 45 million acres, up 651,000 acres from the previous year but still below the five-year average. US winter wheat planted area for harvest in 2021 is up 5% from a year earlier at 32 million acres, but competition from corn and soybeans on the northern Plains is expected to trim spring wheat and durum acres compared to 2020, the USDA said.

The national all wheat yield for 2021 is projected down 1% from last year at 49.1 bu/acre, based on the long-term trend.

At 2.095 billion bu, projected 2021/22 all wheat use is projected down slightly from a year earlier but remains near the five-year average. US domestic use is projected higher, primarily on increased feed and residual use as the narrowing wheat-corn price spread is expected to increase wheat feeding this summer, the USDA said. New-crop wheat exports are forecast at 925 million bu, down from 985 for 2020-21, as a rebound in production in several competing regions, particularly Europe, is expected to result in greater competition for US supplies.

With supplies projected to decline relatively more than total use, 2021-22 all wheat ending stocks are reduced to 698 million bu, down 17% from the previous year.

Source: DePutter Publishing Ltd.

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