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WASDE - Wheat

Jul 11, 2012

WHEAT: Projected U.S. wheat supplies for 2012/13 are raised 5 million bushels with higher

estimated beginning stocks more than offsetting lower forecast production. Beginning stocks

were reported in the June 29 Grain Stocks report 15 million bushels above last month’s

projection. Feed and residual disappearance, seed use, and exports are all lowered slightly for

2011/12. Production for 2012/13 is reduced 10 million bushels as a 14-million-bushel reduction in

winter wheat is only partly offset by higher forecast spring wheat. Among the Hard Red Winter

wheat states, lower production for Texas, Colorado, Oklahoma, and Montana is only partly offset

by increases for Kansas and Nebraska. For the Soft Red Winter (SRW) wheat states, increases

for Ohio, Illinois, and Indiana are mostly offset by reductions in the southern SRW-producing

states.

Total U.S. wheat use for 2012/13 is projected 35 million bushels higher. Domestic U.S. food use

for 2012/13 is raised 5 million bushels on expectations of lower flour extraction rates for this

year’s crop. Projected feed and residual use is lowered 20 million bushels, with higher prices and

stronger export demand. Exports are projected 50 million bushels higher with reduced

competition from Black Sea exporters. Ending stocks for 2012/13 are projected 30 million

bushels lower. The projected range for the 2012/13 season average farm price is raised 60 cents

on both ends to $6.20 to $7.40 per bushel, supported by sharply higher corn and soybean prices.

This compares with the record $7.24 per bushel reported for 2011/12.

Global wheat supplies for 2012/13 are reduced 5.1 million tons with lower world production more

than offsetting a 1.6-million-ton increase in beginning stocks. World production is lowered 6.7

million tons with reductions for Russia, Kazakhstan, and China accounting for most of the

reduction. Russia production is lowered 4.0 million tons with lower expected yields for winter

wheat and lower area and yield prospects for spring wheat. Kazakhstan production is lowered

2.0 million tons as persistent June heat and dryness have also reduced production prospects.

China production is reduced 2.0 million tons reflecting government indications of lower yields.

Canada production is also lowered slightly, down 0.4 million tons, based on lower reported

plantings in the latest official survey by Statistics Canada. EU-27 production is raised 2.1 million

tons with increases for France, Germany, and Hungary more than offsetting a reduction for

Poland.

Global wheat consumption for 2012/13 is lowered 1.8 million tons mostly reflecting lower

expected wheat feeding in Kazakhstan, Australia, and the United States. Partly offsetting are

small increases in wheat feed and residual use for EU-27 and South Korea. Global wheat trade

is lowered slightly with imports lowered for China, Indonesia, and Uzbekistan. Partly offsetting is

an increase in imports for Iran. Exports are reduced 4.0 million tons for Russia and 1.5 million

WASDE-508-2

tons for Kazakhstan. Exports, however, are raised 2.0 million tons for India, 1.5 million tons for

EU-27, and 1.4 million tons for the United States. World ending stocks for 2012/13 are projected

3.3 million tons lower at 182.4 million.

DISCLAIMER: This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Read Entire Disclaimer.

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