NEWS for North Dakotans
Agriculture Communication, North Dakota State University
7 Morrill Hall, Fargo, ND 58105-5665

May 20, 1999

George Flaskerud, Extension Crops Economist
NDSU Extension Service

Little change in the seasonal average wheat price was projected by USDA on May 12 for the 1999-2000 marketing year. In its first supply and demand report for this upcoming year, USDA projected a price of $2.60 to $3.10. An average of $2.65 was estimated for the marketing year to be completed May 31.

Production is projected to be down 305 million bushels at 2.245 billion bushels. Unfortunately, carry-in stocks are expected to be up 247 million bushels while imports are projected to be down by only 3 million bushels. The net result is a supply forecast to be down only 62 million bushels from a year ago.

Total use is projected to increase by a small amount, due to increased exports more than offsetting decreased domestic use. USDA believes that exports will increase by 100 million bushels while domestic use will decrease by 62 million bushels. The decrease results from a sharp reduction in the amount of wheat fed.

Based on these projections, ending stocks for this 1999-2000 marketing year will drop by only 100 million bushels. They were projected to be 36 percent of total use versus an expected 40 percent for the 1998-1999 marketing year.

Ending stocks at the world level are now projected to decrease by 19 million tons to a level where they would be 20 percent of total use, versus 23 percent for 1998-1999. The drawdown came primarily from a 15.57-million-ton decrease in production (3 percent).

USDA projects reduced production in the European Union (EU), China, Eastern Europe, North Africa and Pakistan. Production increases are forecast for Argentina, Australia, Canada, Brazil, India and the former Soviet Union.

USDA projects that exports will increase for Argentina, Australia and Canada but remain about the same for the EU. Substantial carryover stocks would permit the EU to maintain its exports. Imports are projected to increase for China, Eastern Europe, Pakistan and India.

The U.S. share of world trade is projected to increase slightly to 31 percent. Slight increases are also projected for Canada and Australia, resulting in each having a 17 percent share.

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Source: George Flaskerud (701) 231-7377

Editor: Dean Hulse (701) 231-6136