NEWS for North Dakotans
Agriculture Communication, North Dakota State University
7 Morrill Hall, Fargo, ND 58105-5665
July 15, 1999
George Flaskerud, Extension Crops Economist
NDSU Extension Service
A U.S. seasonal average farm price of $2.45 to $2.95 was projected for 1999-2000 wheat by USDA in its Supply and Demand report released July 12. In June, USDA projected $2.60 to $3.10. The estimate for 1998-1999 was $2.65. Two significant changes were made in the wheat outlook relative to June projections: The all-wheat average yield was increased by 2 bushels to 42.7 bushels per acre, and wheat feeding was increased by 25 million bushels to 300 million bushels. The net result was an increase in ending stocks, which are now projected to be 37 percent of total use--versus 35.4 percent a month ago and 38.9 percent for last year.
Hard red spring wheat projections were generally favorable. Production was cut 12 million bushels from a year ago and exports were increased by 45 million bushels. Unfortunately, domestic use was reduced by 36 million bushels. These changes resulted in ending stocks 8 million bushels below a year ago.
Hard red winter wheat projections were favorable too. Production was cut by 151 million bushels from a year ago while exports were increased by 45 million bushels. Similarly, domestic use was reduced, although by a smaller amount than for spring wheat--by 16 million bushels. Ending stocks were projected to decrease from 434 million bushels last year to 382 million bushels this year.
The white wheat outlook also improved from a year ago. A smaller crop resulted in reductions in projected domestic use, exports and ending stocks.
Soft red winter wheat projections were about neutral. Domestic use reflected the increased feeding projected for all wheat relative to June projections, and exports were increased by 22 million bushels. But, these changes only offset larger beginning stocks which left 1999-2000 carryout the same as a year ago.
The durum projections were disappointing. Production was cut by only 9 million bushels from a year ago, domestic use was reduced by 14 million bushels and exports were reduced by 4 million bushels. Consequently, ending stocks were increased from 55 million bushels to 92 million bushels.
The world wheat price outlook deteriorated from last month for 1999-2000. Ending stocks were increased from 118 million tons to 123 million tons. Production was increased not only for the major exporters but also for the major importers. China's production alone was increased by 6 million tons, a major change from last month. Yet, ending stocks for world wheat are still on the decline--down from 137 million tons last year and 139 million tons in 1997-1998.
A seasonal average corn price of $1.65 to $2.05 was projected for 1999-2000 versus $1.80 to $2.20 last month and an estimated $1.95 for 1998-1999. Because of favorable crop conditions, the corn yield estimate was raised from 131.8 bushels per acre last month to 135.8 bushels per acre this month. The export projection was raised, but domestic use was reduced by a similar amount, so ending stocks were increased. They are now projected to be 21 percent of total use versus 19 percent last month.
A seasonal average barley price of $1.60 to $2.00 was projected versus $1.85 to $2.25 last month and an estimated $1.95 for last year. Increased beginning stocks for 1999-2000 was the most significant change in the barley situation relative to a month ago. An additional 11 million bushels were added to the carryover from last year.
A seasonal average oats price of 90 cents to $1.30 was projected, versus 95 cents to $1.35 last month and an estimated $1.15 for last year. As with barley, unexpected extra stocks in the June survey increased the carryover of oats from last year and provided a major reason for the lower price projection.
World ending stocks of coarse grains were projected to increase from the 141 million tons projected in June to 148 million tons, an increase about equal to the increase in U.S. corn production. Ending stocks are now projected to increase from the 1998-1999 level of 144 million tons. The 1997-1998 ending stocks level was 136 million tons.
A seasonal average soybean price of $3.90 to $4.70 was projected versus $3.95 to $4.75 last month and an estimated $5 for last year. The projected price is the lowest since the early 1970s. Few changes were made in the fundamentals. Ending stocks were projected to remain at a very large 590 million bushels, versus 395 million bushels last year.
World ending stocks of soybeans continue to climb. They are projected to be 28 million tons in 1999-2000--compared to 25 million tons in 1998-1999 and 21 million tons in 1997-1998. Ending stocks for all oilseeds show similar increases as record oilseed production was projected.
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Source: George Flaskerud (701) 231-7377
Editor: Dean Hulse (701) 231-6136