USDA Wheat Outlook
13 February 2013
USDA Wheat Outlook - February 2013
US wheat ending stocks for 2012/13 are projected 25 million bushels lower this month
with higher expected feed and residual disappearance. Feed and residual use is projected
25 million bushels higher as weaker cash prices relative to corn support opportunities for
increased wheat use in livestock and poultry rations. Feed and residual use is raised 10
million bushels each for hard red winter (HRW) and soft red winter (SRW) wheat, and
raised 5 million bushels for white wheat. Projected all-wheat exports for 2012/13 are
unchanged, but HRW and hard red spring (HRS) wheat are lowered 25 million bushels
and 5 million bushels, respectively. Offsetting these reductions are projected increases in
SRW and white wheat exports of 25 million bushels and 5 million bushels, respectively.
By-class export changes largely reflect the pace of sales and shipments to date. The
projected season-average farm price for wheat is narrowed 5 cents on both ends of the
range to $7.70-$8.10 per bushel.2012/13 Feed and Residual Use Up and Ending Stocks Down
Global wheat supplies are forecast slightly higher this month, with a small production decrease offset by increased beginning stocks. Global wheat use and ending stocks for 2012/13 are virtually unchanged. World wheat trade in 2012/13 is projected to be down slightly with US exports down 0.5 million tons on the July-June world trade year.
Domestic Outlook
2012/13 Supplies Are Unchanged From January
Total projected supplies for 2012/13, at 3,142 million bushels, are unchanged
from January. Supplies for 2012/13 are 168 million bushels above 2011/12. Higher
production (+270 million bushels) and imports (+18 million bushels) more than
offset lower beginning stocks (-119 million bushels) year to year.
Projected supplies of hard red winter (HRW), hard red spring (HRS), and durum are
up year to year, mostly because of higher production. HRW production is up 224
million bushels, with higher planted area and a smaller abandonment rate. Yields
are also higher year to year because of the recovery from the severe drought in the
Central and Southern Plains the previous year. HRS and durum production are up
107 million bushels and 32 million bushels, respectively, from a year ago with
larger harvested areas and higher yields. Production for these two classes of wheat
recovered from the previous year when excessive moisture and cool temperatures in
the Northern Plains resulted in late seeding and prevented plantings.
Projected supplies of soft red winter (SRW) and white are down from 2011/12.
Both classes had lower production for 2012/13, down 38 million bushels and 55
million bushels, respectively, on the year. Production is down for both classes
because of smaller harvested area and lower yields. SRW planted area was down
because a late row-crop harvest delayed plantings in the Corn Belt and Northeast.
All-wheat 2012 production is estimated at 2,269 million bushels, unchanged from
January, but up 270 million bushels from 2011. The all-wheat harvested area is
estimated at 49.0 million acres, unchanged from January, but up 3.3 million acres
from last year. The US all-wheat estimated yield is 46.3 bushels per acre for 2012,
equaling the 2010 record. The yield is unchanged from January, but up 2.6 bushels
per acre from the previous year.
Total 2012/13 carryin stocks, estimated at 743 million bushels, are unchanged
from January, but down 119 million bushels from 2011/12. Carryin stocks are down
year to year for all classes except SRW. Projected all-wheat imports for 2012/13,
at 130 million bushels, are unchanged from January, but up 18 million bushels from
the previous year.
2012/13 Feed and Residual Use Up and Ending Stocks Down
Domestic use of wheat for 2012/13 is projected at 1,400 million bushels, up 25
million bushels from January and 218 million bushels higher than last year. Food
use for 2011/12 is projected at 950 million bushels, unchanged from January, but up
9 million bushels from 2011/12. The higher year-to-year food use reflects both
continued high extraction rates due to high wheat prices and population growth.
Projected seed use is unchanged from January. Feed and residual use is projected
at 375 million bushels, up 25 million bushels from January because wheat has
become more price competitive with corn in livestock rations. Projected feed and
residual use for 2012/13 is 211 million bushels above feed and residual use for
2011/12.
Projected exports for 2012/13, at 1,050 million bushels, are unchanged from
January. Total wheat exports for 2012/13 are expected to be the same as in 2011/12.
Based largely on the pace of sales and shipments to date, offsetting changes are
made by class of wheat. HRW and HRS wheat exports are down 25 million bushels
and 5 million bushels, respectively, from January. SRW and white wheat exports
are raised 25 million bushels and 5 million bushels, respectively, from January.
Projected total US ending stocks for 2012/13, at 691 million bushels, are down
from January by 25 million bushels with the higher feed and residual use. The
2012/13 ending stocks are down 52 million bushels from 2011/12.
All wheat ending stocks are projected down 7 percent from 2011/12. Durum and
HRS ending stocks are up from 2011/12 by 47 percent and 16 percent, respectively.
White, SRW, and HRW ending stocks are down from 2011/12 by 34 percent, 28
percent, and 4 percent, respectively.
2012/13 Price Range Is Narrowed in February
The projected range for the 2012/13 season-average farm price in February is narrowed to $7.70-$8.10 per bushel, compared with $7.65-$8.15 per bushel from last month based on prices reported to date. This compares with the record $7.24 per bushel reported for 2011/12.
Winter Wheat Conditions Are Mixed
Winter wheat conditions at the end of January 2013 are not as favorable as last year
for the Plains States that provide data about current crop conditions. Nebraska’s
winter wheat crop, for example, has 50 percent rated poor to very poor and only 8
percent rated good to excellent. A year ago, only 3 percent of the State’s crop rated
poor to very poor and 65 percent was rated good to excellent.
Winter wheat conditions are also worse this year than last in Oklahoma, South
Dakota, and Kansas at the end of January 2013. In Oklahoma, 69 percent of the
winter wheat is rated poor to very poor while only 5 percent is rated good to
excellent. A year ago, only 9 percent of the Oklahoma crop was rated poor to very
poor and 54 percent of the crop was good to excellent. In South Dakota, 66 percent
of the winter wheat is rated poor to very poor while only 3 percent is rated good to
excellent. A year ago, 30 percent of the South Dakota crop was rated poor to very
poor and 25 percent of the crop was good to excellent. In Kansas, 39 percent of the
winter wheat is rated poor to very poor while 20 percent is rated good to excellent.
A year ago, only 12 percent of the Kansas crop was rated poor to very poor and 49
percent of the crop was good to excellent.
Two other reporting States, Montana and Illinois, are in better shape than the Plains
States. In Montana, only 9 percent of the crop rated poor to very poor and 41
percent rated good to excellent. A year ago at this time, the Montana crop had 12
percent rated poor to very poor and 26 percent rated good to excellent. In Illinois,
only 3 percent of the crop rated poor to very poor at the end of January and 67
percent rated good to excellent. A year ago at this time, the Illinois crop had 3
percent rated poor to very poor and 75 percent rated good to excellent.
According to USDA Drought Monitor maps, large part of Plains winter wheat area
has been severely impacted by the lack of moisture. Spring rains will be especially
important for the 2013 crop.
US Drought Monitor - 2013 vs 2012

Monthly Outlook Charts
The charts for the report can be found using the link to the Chart Gallery that is on the page just before the tables.
USDA Baseline, 2013-22
Each year, USDA updates its 10-year projections of supply and utilization for major field crops grown in the United States, including wheat, is available at www.ers.usda.gov/publications/oce-usda-agricultural-projections/oce131.aspx.
International Outlook
World Wheat Supplies Unchanged
While global wheat supplies are basically unchanged this month (higher by less
than 0.1 million tons), world wheat production in 2012/13 is forecast down 0.7
million tons at 653.6 million. In Kazakhstan, the government statistical office
released final harvest results that indicate lower-than-expected harvested area and a
0.7-million-ton reduction in wheat output, lowering the harvest to 9.8 million.
Brazilian 2012/13 wheat production is reduced 0.5 million tons to 4.3 million
following disappointing final harvest reports from Rio Grande do Sul, the second
largest wheat-producing State in Brazil, where frost and hail reportedly affected
yields more than expected. Partly offsetting are upward revisions for wheat
production in Ukraine for both the current and previous year (up 0.3 and 0.2 million
tons for 2012/13 and 2011/12, respectively) and in Belarus, up 0.1 million tons.
Small adjustments are made for Mexico (where the harvest was completed in June
2012), South Africa, and South Korea. Series revisions resulting in production
changes are made for a number of prior years for Paraguay and Moldova.
The small reduction in world wheat output is offset by a 0.8-million-ton increase in
global beginning stocks, due to a revision of the wheat food consumption series for
South Korea for the last 3 years, the already mentioned revisions for Paraguay and
Moldova, and a reduction of 2011/12 feed use in Israel.
Slight changes are projected for foreign wheat use for 2012/13, with a reduction of
less than a million tons for both food use and wheat feeding. Wheat feeding in the
EU-27 is reduced 0.5 million tons to 52.0 million this month, as the region is
expected to feed more corn coming from Brazil, while exporting additional wheat.
Projected feed use is also decreased 0.3 million tons to 0.1 million for Saudi Arabia,
as that country returns to its historical pattern of higher barley and marginal wheat
feeding, after last year’s high feed wheat availability and relatively low prices
caused a spike in wheat feeding. Wheat feeding is trimmed for Viet Nam and Israel
as a result of lower imports. Partly offsetting this reduction is projected higher
wheat feeding in Korea, up 0.6 million tons on account of a rebound in its pork
sector, which had been badly hurt by a foot-and-mouth disease outbreak in 2010-11.
Lower (0.2 million tons) feeding in Kazakhstan is fully offset by an increase in
Ukraine, both reflecting adjustments in wheat output. A small wheat feed use
adjustment is made for Paraguay following the production series revision.
With foreign wheat supplies slightly up and wheat consumption down a little,
foreign wheat ending stocks for 2012/13 are projected 0.8 million tons higher this
month to 157.9 million. World ending stocks are practically unchanged this month
at 176.7 million tons, with a small reduction in US stocks. Projected ending stocks
are up 0.5 million tons to 3.9 million in Iran (higher imports) and 0.4 million tons in
South Korea (larger supplies partly offset by higher consumption). Stocks are also
up in Ukraine (0.3 million tons), Belarus (0.1 million tons), and slightly up in
Kazakhstan, Moldova, and Paraguay. Partly offsetting are reductions in ending
stocks for Morocco (down 0.5 million tons on lower projected imports), and very
small reductions in stocks for Mexico, South Africa, and Viet Nam.
World Wheat Trade for 2012/13 Projected Down Slightly
World wheat trade for the international July-June year 2012/13 is projected to be
down slightly this month by 0.3 million tons to 140.2 million. EU-27 and Indian
exports are both up 0.5 million tons, to 18.5 and 8.5 million, respectively, while
exports for the United States, Kazakhstan, and Brazil are forecast lower. The EU-27
is expected to export more wheat freed up from animal feeding, while replacing it
by importing additional quantities of corn. India continues to issue tenders from the
overloaded government stocks ahead of the upcoming wheat harvest and to export
wheat at a fast pace; India has become a prominent player in world wheat exports
this year. Lower supplies and the pace of Kazakhstan and Brazilian wheat exports,
on the other hand, support lower export projections, down 0.5 and 0.3 million tons
to 6.5 and 1.2 million, respectively.
Projected wheat imports for 2012/13 are little changed this month. For South Korea,
wheat imports are expected to increase 0.6 million tons to 5.0 million, due to the
pace of confirmed purchases mainly from India, which is currently the cheapest
source of feed-quality wheat. Imports are also up 0.3 million tons for Iran based on
purchases from the United States, Russia, and Germany. At the same time,
projected wheat imports are reduced 0.5 million tons for Morocco, as favorable
wheat harvest prospects for the next year are expected to dampen imports. With
Russia and Ukraine having already exported most of their wheat, it is becoming
increasingly hard to find readily available supplies of feed wheat, which slows the
purchases of a number of feed wheat importers. For this reason, projected imports
are down 0.3 million tons for Saudi Arabia, and 0.2 million tons for both Israel and
Viet Nam.
US exports projected for the 2012/13 June-May marketing year are unchanged this
month at 1,050 million bushels (28.6 million tons). However, for the July-June
international trade year, US exports are projected down 0.5 million tons to 29.0
million as wheat exports for the month of June 2013 are expected lower. Higher
projected wheat feeding in the United States is expected to boost demand for SRW
wheat leaving lesser amounts available for exports, while expected availability of
HRW wheat for export is also declining with worsening production prospects
because of persistent dryness in the Southern and Central Plains. For July through
December 2012, US Census data indicate exports of about 11.5 million tons, down
1.8 million from the previous year. Grain inspections for January 2013 were higher
by 0.14 million tons compared with last year. Outstanding export sales as of
January 31, 2013 are up 0.5 million tons compared with last year at this time. The
pace of shipments in the final months of 2012/13 are expected to be stronger than in
the same months last year.
February 2013
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