world agricultural supply and demand estimates in 2011

ISSN: 1554-9089 World Agricultural Supply and Demand Estimates

United States Department of Agriculture

Office of the Chief Economist Agricultural Marketing Service

Farm Service Agency

Economic Research Service

Foreign Agricultural Service

WASDE - 489 Approved by the World Agricultural Outlook Board December 10, 2010 WHEAT: U.S. wheat ending stocks for 2010/11 are projected 10 million bushels higher this month reflecting lower domestic use. Projected food use is lowered 10 million bushels on the latest mill-grind data from the U.S. Census Bureau which indicate flour extraction rates that are higher than the long-term average for a third straight year. With historically high wheat prices, millers continue to get more flour out of each bushel of wheat. Total exports are unchanged, but small shifts among classes result in higher projected exports of Hard Red Spring and White wheat and lower projected exports of Hard Red Winter wheat and durum. The projected marketing-year average price received by producers is narrowed 5 cents on each end of the range to $5.30 to $5.70 per bushel.

Global 2010/11 wheat supplies are projected 4.9 million tons higher this month reflecting an increase in EU-27 beginnings stocks with lower 2009/10 feed use and higher 2010/11 production in Australia, Pakistan, Canada, Brazil, and Ukraine. Production for Australia is raised 1.5 million tons as higher reported yields in eastern Australia continue to boost production prospects. Recent, heavy rains in many of these same areas, however, have dampened production prospects and reduced wheat quality. Official government statistics for Pakistan and Canada boost production 1.3 million tons and 1.0 million tons, respectively. Brazil production is raised 0.4 million tons as favorably dry harvest weather in southern growing areas add to output. Ukraine production is raised 0.2 million tons on the latest government data. Partly offsetting these increases is a 0.5-million-ton reduction for Russia. World wheat trade for 2010/11 is projected lower this month as tighter supplies of high quality wheat raise world prices and slow demand in several smaller markets. Wheat imports are also reduced 0.5 million tons each for Brazil and EU-27. Larger production reduces the need for imports in Brazil. In EU-27, lower expected wheat feeding reduces demand for imported wheat. World wheat exports are lowered 1.7 million tons with reductions for Australia, China, Canada, and Mexico. Export prospects for Australia and Canada are reduced reflecting the lower quality of wheat in both countries this year. Partly offsetting are increases for Iran, Serbia, and Croatia.

Global 2010/11 wheat consumption is raised with higher expected wheat feeding in China and higher expected feed and residual disappearance in Australia and Canada. Reduced government incentives to export wheat from China make more wheat available for domestic feeding. Larger supplies of lower quality wheat in Australia and Canada are expected to boost feeding and increase residual losses in both countries. Partly offsetting are 0.5-million-ton reductions in feed use for both EU-17 and Russia, and small declines in food use in several countries due to high prices. Ending stocks are raised 4.2 million tons with the largest increases for Pakistan, EU-27, Australia, and Canada.