Wheat Outlook: Projected U.S. 2014/15 ending stocks down year to year

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U.S. wheat supplies for 2014/15 are projected down 10 percent from 2013/14 with beginning stocks, production, and imports all expected to be lower. Supplies for the new marketing year are projected to be the lowest since 2007/08. Production is projected at 1,963 million bushels, down 8 percent from last year. The all wheat yield is projected at 42.7 bushels per acre, down 4.5 bushels from the 2013/14 record. The survey-based forecast for 2014/15 all winter wheat production is down 9 percent on the year with the harvested-toplanted ratio just above last year’s 11-year low and the yield forecast at its lowest level since 2007/08. Most of the decline year to year in winter wheat reflects lower area and yields for soft red winter wheat. This year’s lower hard red winter (HRW) wheat yield forecast is offset by higher harvested area, leaving HRW production just above last year’s very low level. Continued drought and April freeze events have sharply reduced yield prospects for HRW wheat. White winter wheat production is forecast lower on the year with reduced area and yields. Spring wheat production for 2014/15 is projected to decline 6 percent as higher area is more than offset by lower projected yields. Durum yields last year were well above trend and other spring yields were record high.

Total U.S. wheat use for 2014/15 is projected down 11 percent year to year as feed and residual disappearance and exports are expected to fall with tighter supplies and higher prices. Projected feed and residual disappearance is down 50 million bushels as abundant feed grain supplies and lower feed grain prices limit wheat feeding during the summer months. Partly offsetting are a 10-million-bushel increase in domestic food use and a 2- million-bushel increase in seed use. Exports for 2014/15 are projected at 950 million bushels, down 235 million from this month’s higher 2013/14 projection, as large supplies in other major exporting countries and tight domestic supplies of HRW wheat limit U.S. shipments. U.S. ending stocks are projected to decline for a fifth consecutive year. At 540 million bushels, 2014/15 ending stocks would be down 43 million from 2013/14. The all wheat season-average farm price is projected at $6.65 to $7.95 per bushel.

World wheat production in 2014/15 is projected to decline from the previous year’s record but remain the second largest on record. An increase in foreign beginning stocks are forecast to offset the production decline, leaving slightly increased foreign supplies. With higher prices, modest reductions in wheat use are expected, and global stocks are projected to increase for the second consecutive year.

Ending Stocks for 2014/15 Projected To Decrease From 2013/14

Ending stocks of wheat for 2014/15 are projected to be down 43 million bushels from 2013/14 as total supplies decrease more than total use. Total wheat supplies for 2014/15 are projected down 317 million bushels because of lower production, carryin stocks, and imports from 2013/14. Total projected uses are down 273 million bushels from 2013/14 because of both lower exports and domestic use.

Total production is projected at 1,963 million bushels, down 167 million bushels from 2013/14.

Winter Wheat Production

The survey-based forecast of winter wheat production, at 1,403 million bushels, is down 131 million bushels from 2013. Expected harvested area is 32.6 million acres, up 0.2 million acres from last year as a higher harvest-to-planted ratio offset a lower planted area. The U.S. winter wheat yield is forecast at 43.1 bushels per acre, down 4.3 bushels from the previous year.

Winter Wheat Production Estimates by Class

Hard red winter (HRW) production is forecast up 2 million bushels from a year ago to 746 million bushels this year. Production is up for the 2014 crop, as higher planted area and a lower expected abandonment rate offset a lower expected yield. Forecast planted area, harvested area, and yield and year-to-year changes for 2014 from 2013 are 30.2 million acres, up 0.6 million acres; 22.2 million acres, up 2.0 million acres; and 33.6 bushels per acre, down 3.2 bushels per acre, respectively.

Soft red winter (SRW) production is forecast to be down 118 million bushels from last year and is expected to total 447 million bushels this year. SRW production is forecast lower with lower planted and harvested areas and a lower yield. Forecast planted area, harvested area, and yield and year-to-year changes for 2014 from 2013 are 8.4 million acres, down 1.6 million acres; 7.2 million acres, down 1.7 million acres; and 62.3 bushels per acre, down 1.4 bushels per acre, respectively.

White winter wheat production for 2014 is forecast to total 209 million bushels, down 16 million bushels from a year ago. The planted and harvested areas, production, and yield for white winter wheat were as follows (hard white winter = HWW and soft white winter = SWW):

2014 HWW SWW

Planted area (million acres) 0.378 2.967

Harvested area (million acres) 0.316 2.85

Yield (bushels/acre) 34.6 69.6

Production (million bushels) 10.9 198.3

2013 HWW SWW

Planted area (million acres) 0.365 3.134

Harvested area (million acres) 0.283 3.028

Yield (bushels/acre) 39.4 70.7

Production (million bushels) 11.2 214.2

Desert durum production in California and Arizona is forecast at 12.4 million bushels for 2014. This production is less than the 14.8 million bushels in 2013 due to smaller harvested area and lower yield.

Projected 2014/15 Utilization

Total U.S. wheat use for 2014/15 is projected down 273 million bushels from 2013/14 to 2,166 million bushels with both lower expected domestic use and exports. Food use is projected at 970 million bushels, up 10 million from the current year, as flour extraction rates fall from 2013/14 and consumption grows with population. Feed and residual use is projected at 170 million bushels, down from the 220 million bushels projected for 2013/14 as smaller supplies and lower prices for feed grains in 2014/15 limit wheat feeding this summer. Exports are projected at 950 million bushels, down 235 million bushels from 2013/14 as large crops in major world export competitor countries and higher prices are expected to limit U.S. exports. Thus, ending stocks for 2014/15 are projected at 540 million bushels, down 43 million bushels from 2013/14.

2014/15 Price Range Projection

The 2014/15 season-average farm price range is projected at $6.65 to $7.95 per bushel. The midpoint of this range is above the $6.85 per bushel projected for 2013/14.

2013/14 Marketing Year Discussion: Projected 2013/14 Supplies Up Slightly This Month

Projected total 2013/14 supplies, at 3,023 million bushels, are up 10 million bushels this month. Total projected imports are up 10 million bushels based on pace and higher U.S. prices. Most of the increase, 7 million bushels, is for HRS. HRW imports are up 1 million bushels and durum imports are up 2 million bushels.

Projected 2013/14 Supplies Down From 2012/13

Total U.S. wheat supply for 2013/14 is down 108 million bushels from 2012/13 as reduced production and lower beginning stocks more than offset higher imports. Supplies of HRW and durum are down year to year, while supplies are up for the other classes. HRW supplies decreased the most, as smaller production more than offsets higher beginning stocks. HRW production is down from 2012 due partially to the smaller planted area for the 2013 crop, and both a higher abandonment rate and a lower yield because of severe drought and spring freeze damage. SRW supplies were up the most year to year as higher production and imports more than offset lower beginning stocks. SRW production is higher than 2012 because of larger harvested area and higher yield.

Projected Total 2013/14 Utilization Is Up This Month

Projected 2013/14 total U.S. wheat use, at 2,439 million bushels, is up 10 million bushels this month. Projected food use, seed use, and feed and residual use are unchanged. Total projected exports are raised 10 million bushels this month. Projected exports of HRW, HRS, and white wheat are each raised 5 million bushels. SRW exports are lowered 5 million bushels. These by-class changes are based on pace to date.

Projected 2013/14 Use Is Up From 2012/13

Projected total use for 2013/14 is up 25 million bushels from 2012/13 as higher exports more than offset lower domestic use. Domestic use is expected to be down 152 million bushels from 2012/13, with exports projected up 178 million bushels. Domestic use is down because feed and residual use is expected to fall 168 million bushels from 2012/13. Total food use is expected 15 million bushels higher than in 2012/13, with population growth and an expected lower flour extraction rate.

Projected 2013/14 Total Ending Stocks Unchanged From April, But Down From 2012/13

The projected 2013/14 U.S. total wheat ending stocks, at 583 million bushels, are unchanged from April as the 10-million-bushel increase in imports is offset by the 10-million-bushel increase in exports. These projected ending stocks are down 135 million bushels from 2012/13.

Total ending stocks for 2013/14 are expected to decrease by 19 percent from 2012/13. Stocks of HRW and white are expected down 45 percent and 22 percent, respectively. Stocks of HRS, SRW, and durum are expected up 16 percent, 5 percent, and 5 percent, respectively.

2013/14 Price Range Projection Replaced With a Point Estimate

The 2013/14 season-average farm price range of $6.75 to $6.95 per bushel is replaced with a point estimate $6.85 this month. The 2013/14 price is down from the record $7.77 per bushel reported for 2012/13.

Winter Wheat Conditions Are Mixed

The May 5 Crop Progress report from the U.S. Department of Agriculture’s National Agricultural Statistics Service indicated that 31 percent of the winter wheat crop is rated good to excellent and 38 percent was rated poor to very poor. A year ago at this time, 32 percent of the winter wheat crop was rated good to excellent, and 39 percent was rated poor to very poor. Drought conditions continue to be a problem on the Central and Southern Plains.

Conditions are poor in Texas, but better than a year ago. This year, 64 percent of the Texas crop is rated poor to very poor, compared with 74 percent for the 2013 crop. Oklahoma’s situation is worse. This year, 73 percent of the Oklahoma crop is rated poor to very poor, compared with 45 percent for the 2013 crop. The situation in Kansas is also worse. This year, 47 percent of the Kansas crop is rated poor to very poor, compared with 40 percent for the 2013 crop. The crop conditions for Nebraska, Colorado, and South Dakota are better year to year. Respectively, the shares of each State’s 2014 and 2013 crops that are rated poor to very poor are: Nebraska, 19 percent to 49 percent; Colorado, 37 percent to 56 percent; and South Dakota, 3 percent to 62 percent.

The SRW-producing States are generally in good condition this year compared to the winter wheat crop in the Plains, but slightly worse than a year ago. The SRWproducing States’ 2014 crop averages 56 percent rated good to excellent and 9 percent poor to very poor. The SRW-producing States’ crop at this time last year averaged 67 percent rated good to excellent, and 6 percent poor to very poor.

Conditions for the 2014 crop are good in the Pacific Northwest (PNW), but down slightly from last year. Winter wheat in the PNW States average 59 percent rated good to excellent and 9 percent poor to very poor. Last year, these States averaged 68 percent good to excellent and 6 percent poor to very poor.

USDA Wheat Baseline, 2014-23

Each year, USDA updates its 10-year projections of supply and utilization for major field crops grown in the United States, including wheat. A detailed discussion summarizing the historical forces determining U.S. wheat supply and utilization, along with the analysis underlying the wheat projections for 2014-23, is available at http://1.usa.gov/1jvYGRn.