U.S. wheat output projected to fall more than 9% year-over-year to 1.99 billion bushels in 2011/2012, USDA says; ending stocks to fall 4% to 828 million bushels

Andrew Rogers

WASHINGTON , November 14, 2011 (press release) – U.S. Wheat Supplies Slightly Lower This Month

U.S. wheat supplies for 2011/12 are lowered 9 million bushels based on updated production estimates for the states resurveyed following the September 30 Small Grains report. Adjustments to production in these states, where significant acreage remained unharvested in early September, lowers production estimates for hard red spring (HRS) wheat and durum. An increase in white wheat production is partly offsetting. Projected use for 2011/12 is unchanged for all wheat; however, domestic food use is projected higher for hard red winter (HRW) wheat and lower for HRS wheat. Projected exports are raised for HRS and lowered for HRW. All wheat ending stocks are lowered 9 million bushels in line with the production change. The season-average farm price is projected lower at $7.05 to $7.75 per bushel compared with $7.10 to $7.90 last month, reflecting the latest reported prices.

Increased production reported for Kazakhstan and EU-27 raise this month’s forecasts for 2011/12 world wheat supply, use, and ending stocks. Wheat exports are projected higher for Russia and EU-27.

Domestic Situation and Outlook
Ending Stocks for 2011/12 Are Down From October With Reduced Spring Wheat Production

Projected ending stocks for 2011/12, at 828 million bushels, are down 9 million bushels from October and down 34 million bushels from 2010/11. Total wheat supplies for 2011/12 are projected down 297 million bushels from 2010/11 because of both smaller carryin stocks and production as compared with 2010/11. Total projected uses are unchanged from October, but down 264 million bushels from 2010/11 as lower exports more than offset higher domestic use.

Total production is estimated at 1,999 million bushels, down 9 million bushels from October and down 208 million bushels from 2010/11.

Winter Wheat Production Estimates by Class

There are no winter wheat production changes this month. Only spring wheat production was re- surveyed for the November Crop Production report.

Hard red winter (HRW) production is estimated to be 780 million bushels, down 238 million bushels from a year ago. Production is down from last year because of reduced harvested area and lower yields.

Year to year, the planted area for the 2011 crop is slightly smaller than 2010, but the rate of abandonment is up sharply and yields are down from the previous year due to the severe drought on the Central and Southern Plains. Planted and harvested acres were down from 2010 in most of the major HRW growing States. Planted area, harvested area, and yield for 2011, and year-to- year changes, respectively, from 2010 are 28.5 million acres, down 0.1 million acres; 21.4 million acres, down 2.6 million acres; and 36.4 bushels per acre, down 6.0 bushels per acre.

Soft red winter (SRW) production is estimated at 458 million bushels, up 221 million bushels from the previous year. Production is up from last year because larger harvested and higher yields. The 2011 crop area recovered from 2010, when a rain-delayed row-crop harvest and low prices reduced SRW seedings in the fall of 2009.

Due to excellent weather conditions through much of the season, production was up significantly from the previous year, with production in many of the SRW States up more than 100 percent from 2010. Record high yields were reported in Alabama, Louisiana, Michigan, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia. Planted area, harvested area, and yield for 2011, and year-to-year changes, respectively, from 2010 are 8.6 million acres, up 3.3 million acres; 7.4 million acres, up 3.0 million acres; and 61.7 bushels per acre, up 7.4 bushels per acre.

White winter wheat production for 2011 is estimated to total 256 million bushels, up 27 million bushels from the previous year.

Spring Wheat Production Estimates by Class

Hard red spring (HRS) production is estimated at 398 million bushels, down 7 million bushels from October and down 172 million bushels from 2010. Production is down from last month because of lower yields, -0.7 bushels per acre.

HRS production is down from a year ago with lower planted and harvested areas and lower yield. Excessive moisture and cool temperatures on the Northern Plains resulted in late seeding and prevented plantings. Planted area, harvested area, yield, and year-to-year changes for 2011, respectively, are 11.6 million acres, down 1.4 million acres; 11.3 million acres, down 1.3 million acres; and 35.2 bushels per acre, down 9.9 bushels per acre.

White spring production is estimated to total 57 million bushels, unchanged from October and up 11 million bushels from 2010/11.

Durum wheat production is estimated to total 50 million bushels, down 2 million bushels from October and down 56 million bushels from the previous year. Production is down from last month because of reduced harvested area and lower yield, -0.01 million acres and -0.8 bushels per acre, respectively.

Excessive moisture and cool temperatures on the Northern Plains resulted in late seeding and prevented plantings, which reduced planted area to the lowest since 1960. Planted area, harvested area, yield, and year-to-year changes for 2011, respectively, are 1.37 million acres, down 1.20 million acres; 1.31 million acres, down 1.21 million acres; and 38.5 bushels per acre, down 3.6 bushels per acre from a year ago.

Hard and Soft White Wheat Area and Production

All white wheat production for 2011 is 314 million bushels, up 39 million bushels from 2010. All white wheat planted and harvested areas for 2011, at 4.4 million acres and 4.2 million acres, respectively, are both up from 2010. All white wheat yield for 2011 is 74.0 bushels per acre, up 6.0 bushels from 2010.

Total soft white wheat production for 2011 is 289 million bushels, up 37 million bushels from 2010. Total hard white wheat production is 24 million bushels, down 1 million bushels from 2010.

The all soft white planted area for 2011, at 3.94 million acres, is up 0.16 million acres from 2010. The all hard white wheat planted area is 471,000 acres, up from 462,000 acres in 2010.

The all soft white harvested area for 2011, at 3.82 million acres, is up 0.19 million acres from 2010. The all hard white wheat harvested area is 416,000 acres, unchanged from 2010.

The all soft white wheat yield for 2011 is 75.7 bushels per acre, up 6.2 bushels from 2010. The all hard white wheat yield for 2011 is 58.3 bushels per acre, up 3.6 bushels from 2010.

Year-to-Year By-Class Comparisons

Projected supplies of HRW, HRS, and durum are down year to year for 2011/12, mostly because of lower production. SRW and white wheat supplies are up from 2010/11, especially SRW because of the recovery of production from the previous year. Projected 2011/12 carryin stocks were nearly unchanged for HRW, white, and durum, but sharply lower for HRS and SRW.

Domestic use is up year to year for HRW, SRW, and white, but down for the other two classes. Projected exports are significantly lower for HRW, HRS, and durum.

Projected ending stocks for 2011/12 are down year to year for HRW, HRS, and durum, but up for SRW and white. The year-to-year percentage decrease in all-wheat ending stocks is 4 percent. HRS and durum projected ending stocks are down the most percentagewise, 30 percent and 26 percent, respectively. HRW ending stocks are also expected down sharply, 18 percent. SRW and white ending stocks are expected up 42 percent and 31 percent, respectively.

Projected 2011/12 Supplies Down Slightly This Month

The 2011/12 projected U.S. wheat supplies are down slightly from October with lower production. Beginning stocks for 2011/12, at 862 million bushels, are unchanged from October, but down 114 million bushels from 2010/11. Projected imports, at 120 million bushels, are unchanged from October, and up 23 million bushels from 2010/11. Imports of HRS and durum are up year to year because of expected tight markets in the United States for these classes of wheat. Production is estimated at 1,999 million bushels, down 9 million bushels from October and down 208 million bushels from 2010/11.

Projected 2011/12 Utilization Unchanged This Month

Total projected U.S. wheat use for 2011/12, at 2,153 million bushels, is unchanged from October. Total use is expected to be lower than 2010/11 by 264 million bushels as lower projected exports more than offset higher expected domestic use.

Food use is projected at 940 million bushels, unchanged from October, but up 14 million from the previous marketing year. There is a 10-million-bushel shift from HRS to HRW this month. Because of reduced HRS supplies, a large price premium for HRS over HRW, and abundant supplies of high-protein HRW, millers are expected to substitute HRW for HRS.

There is no change in projected seed use for 2011/12 this month. Feed and residual use is projected at 160 million bushels, unchanged from October, but up 28
million bushels from 2010/11.

Exports are projected at 975 million bushels, unchanged from October, but down 314 million bushels from 2010/11. Based on the pace to date, projected HRS exports are raised 30 million bushels while HRW exports are lowered 30 million bushels.

Thus, ending stocks for 2011/12 are projected at 828 million bushels, down 9 million bushels from October and down 34 million bushels from 2010/11.

2011/12 Price Range Is Lowered

The 2011/12 season-average farm price range is projected at $7.05 to $7.75 per bushel, down from $7.10 to $7.90 from October, based on recent farm prices reported for wheat. This compares with $5.70 for the previous year and the record high of $6.78 for 2008/09.

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