NEWS for North Dakotans
Agriculture Communication, North Dakota State University
7 Morrill Hall, Fargo, ND 58105-5665
July 13, 2000
by George Flaskerud, Extension Crops Economist
In the Supply and Demand report released July 12, USDA analysts have projected a seasonal average farm price of $2.25 to $2.75 for the 2000-2001 marketing year for wheat. USDA projected $2.40 to $2.90 in June. The estimate for the 1999-2000 marketing year was $2.50. The July report gave USDA’s first 2000-2001 outlook for the classes of wheat. (The marketing year begins June 1 for wheat, barley and oats and Sept. 1 for corn, soybeans and sunflowers.)
Several significant changes were made in the wheat outlook relative to June projections: one, production was increased by 31 million bushels due to larger spring wheat and durum production; two, beginning stocks were increased by 33 million bushels; three, feeding was decreased by 49 million bushels due to sharply lower corn prices in recent weeks; and four, exports were reduced by 25 million bushels because of increased competition. The net result was an increase in ending stocks now projected to be 40.4 percent of total use, versus 33.4 percent a month ago and 39.7 percent for last year.
Hard red winter wheat projections were price-positive on balance, the only class of wheat with that distinction. Production was cut by 168 million bushels from a year ago, exports were reduced by 20 million bushels and domestic use was reduced by 31 million bushels. Ending stocks were projected to decrease by 96 million bushels.
Hard red spring wheat production was increased by 22 million bushels from a year ago while exports were left unchanged and domestic use was reduced by 15 million bushels. These changes more than offset lower beginning stocks, which resulted in ending stocks projections being 25 million bushels greater than a year ago.
Soft red winter wheat production was increased by about 14 million bushels and domestic use was reduced by 16 million bushels while exports were increased by 20 million bushels. These changes resulted in a 9 million bushel increase in carryover, compared to a year ago.
White wheat production was increased substantially. Increases for domestic use and exports were somewhat offsetting, but ending stocks were still projected to increase by 31 million bushels.
Durum production was increased by 29 million bushels from a year ago, domestic use and exports were left nearly unchanged. Consequently, ending stocks were increased from 50 million bushels to 77 million bushels.
The world wheat price outlook deteriorated from last month for 2000-2001 in that production was increased by 5 million tons. Gains from Canada, India and other countries more than offset reductions for China, Eastern Europe and the Ukraine. Although up from a month ago, ending stocks are still on the decline--down 12.6 million tons from last year and 23.7 million tons from 1998-1999.
A seasonal average corn price of $1.50 to $1.90 was projected for 2000-2001, versus $1.65 to $2.05 last month and an estimated $1.80 for 1999-2000. Because of additional acres, production was increased from 9.7 billion bushels last month to 10 billion bushels this month. Beginning stocks were also increased. The export projection was raised, but domestic use was reduced by almost as much. Ending stocks are now projected to be 22.6 percent of total use, versus 19.3 percent last month.
A seasonal average barley price of $1.65 to $2.05 was projected for the 2000-2001 marketing year, versus $1.80 to $2.20 last month and an estimated $2.15 for last year. The price reduction from last month was due more to the negative price outlook for corn than anything else. The fundamentals for barley changed little from a month ago.
A seasonal average oats price of 85 cents to $1.25 was projected for the 2000-2001 marketing year, versus 90 to $1.30 last month and an estimated $1.10 for last year. As with barley, the abundance of corn was detrimental to the oats price.
World ending stocks of coarse grains are expected to increase from the 152.8 million tons projected in June to 154.1 million tons. Ending stocks are now projected to fall between the 1999-2000 level of 153.2 million tons and the 1998-1999 level of 158.8 million tons.
A seasonal average soybean price of $3.90 to $4.90 was projected for the 2000-2001 marketing year, versus$4 to $5 last month and an estimated $4.65 for last year. Minor changes were made in the fundamentals relative to a month ago. Ending stock projections continue to be very large at 480 million bushels.
World ending stocks of soybeans continue to climb and are projected to be 25.3 million tons in 2000-2001, compared to 19.9 million tons in 1999-2000 and 24.3 million tons in 1998-1999.
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Source: George Flaskerud (701) 231-7377
Editor: Dean Hulse (701) 231-6136