USDA Says US Wheat Supplies Will Be High In 2010-11

U.S. wheat farmers are expected to produce a smaller crop this year, but they are also forecast to start out the 2010-11 marketing year with large beginning stocks and finish with even larger ending stocks, the U.S. Department of Agriculture said Tuesday.

The USDA, in its monthly World Agricultural Supply and Demand Estimates report, said the carry-in for 2010-11 is 950 million bushels, a 45% increase from what it was for 2009-10 and the carry-out this year is predicted to reach 997 million bushels. Beginning stocks, the USDA said, are the highest they have been in 10 years.The larger supplies this year are expected to overshadow lower production, the USDA said.

The new forecast for 2010-11 wheat production is 2.043 billion bushels, down from last year's 2.216 billion, but still higher that the USDA predicted earlier this year. The USDA, during its annual Agricultural Outlook Forum predicted wheat production for 2010-11 would only reach 1.945 billion bushels.

Despite the smaller crop, as well as a new forecast for stronger domestic use and exports, ending stocks will be the highest since 1987-88, the USDA said.

Source: CME Group with reference to USDA