WASDE Wheat: Increased U.S. Beginning Stocks, Production

    Projected U.S. wheat supplies for 2016/17 are raised this month on both increased beginning stocks and larger winter wheat production. Beginning stocks are raised slightly with a 3-million-bushel decrease in 2015/16 imports partially offsetting a 5-million-bushel export reduction.

    Projected production for 2016/17 is up 79 million bushels mainly on improved prospects for the Hard Red Winter wheat crop in the Great Plains following excellent growing conditions throughout the spring months.

    Consequently, the winter wheat yield is forecast to be record high. Feed and residual use for 2016/17 is raised 30 million bushels to 200 million on the larger crop as well as increased wheat price competitiveness with corn.

    Imports are lowered 5 million bushels, and exports are raised 25 million bushels to 900 million, up significantly from the previous year’s depressed total but still below the five year-average. Ending stocks are raised 21 million bushels to 1,050 million, the largest in 29 years.

    Global wheat supplies for 2016/17 are raised 3.9 million tons with production increases for the EU, Russia, and the United States more than offsetting reductions for Brazil and Mexico. The EU production increase is entirely for Spain and reflects favorable growing conditions as confirmed with satellite imagery data.

    The production forecast for France is unchanged despite heavy rain for the month of May. Although abundant precipitation can reduce yield prospects in low-lying areas, it may increase yield elsewhere. French wheat was in excellent condition prior to the onset of the rain and expectations for a return to dryness in the latter part of the grain filling stage is anticipated to further mitigate crop losses.

    Production in Russia is increased on updated government estimates showing larger spring wheat area. Foreign exports for 2016/17 are up 1.0 million tons with the EU and Russia each up 0.5 million tons given their increased production. The primary global import changes are a 1.0-million-ton increase for India on low international prices increasing demand, and a 0.4-million-ton increase for Indonesia.

    Total world consumption is up 3.4 million tons led by a 1.2-million-ton increase for India food use, a 1.0-million-ton increase for EU feed use, and a 0.4-million-ton increase for Indonesia feed use. For the EU, the late season rain in major producing regions is expected to reduce wheat quality and increase feeding. Global ending stocks are raised fractionally and remain record large.

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