The United States Department of Agriculture today released its WASDE report, in which it forecast a 50 million bushel (1.4 million tonne) increase in its own wheat stocks for 2012/13. However, the USDA said wheat exports from the US were expected to be lowered by another 50m bushels on the back of increased competition from other global regions.

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Global wheat stocks fall

Although production increased in the US, as wheat escaped the worst of this year's drought, the WASDE report predicted that global wheat supplies would fall 1.7 million tonnes, due to increased use in the EU and poor harvests in China. Global wheat production for 2012/13 was also lowered 1.5 million tonnes in the report; harvesting in the Southern hemisphere has revealed the extent of climatic effects on wheat in several regions.

However, Pakistan and Algeria were shown to have boosted production and trade is set to increase this year, on higher export trade from the Ukraine and EU. Also, contrary to fears expressed prior to the report's release, wheat feeding for 2012/13 was lowered 2.3 million tonnes.

Commentators had expressed fears that the USDA’s report could spark further grain rallies, driving the price of essential staple grains such as wheat higher still. Grains including wheat and maize remain at their highest levels in years following price hikes caused by panic over drought earlier in the year.

USDA said that current predictions place the world wheat supply at 158 million tonnes, 42 million tonnes higher than 2008 levels, when the last major food crisis sparked unrest in a number of nations.

Other findings

The USDA report also put global coarse grain supplies 1.6 million tonnes higher. Feed grain supplies were higher and production is up, offering slight succour to those who had expressed concerns that high grain prices may put extra pressure on wheat as farmers began feeding their animals wheat instead of maize and soy.

Global coarse grain production is set to rise to its second highest level on record in 2012/13. Barley and Rye production is up by a small amount in the EU, though oat production has dropped off slightly.

Soybean production in the US was forecast at 2.917 billion bushels (nearly 81 million tonnes), up 111 million bushels (3 million tonnes) from October estimates. Global oilseed production was raised 4 million tonnes in the report, with soybeans accounting for 75 percent of the increase, mostly in the United States and the Ukraine.

The report is available here.

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