Wheat Outlook
William I. Tierney, Jr. PhD
Chief Economist
AgResource Company, Chicago IL.
OSU Extension Webinar
April 15, 2013
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US Wheat Supply & Demand
WHEAT
Mln Acres, Bushels
Area Planted
Abandonment (%)
Area Harvested
Yield
Beginning Stocks
Production
Imports
Supply, Total
Food
Seed
Feed and Residual
Domestic, Total
Exports
Use, Total
Ending Stocks
Ending Stocks/Use (%)
HRW Crop Ins Initial Price ($/Bu)
Avg. Farm Price ($/Bu) 1/
Futures-Based Forecast ($/Bu) 2/
USDA Price Ratio: Wheat/Corn (%)
2011/12
USDA
Est.
2012/13
USDA
Mar
2012/13
USDA
Apr
2012/13
ARC
Proj.
2013/14
USDA Outlook Conf.
2013/14
ARC
Proj.
54.4
16.0%
45.7
43.7
862
1,999
112
2,974
941
76
164
1,182
1,050
2,231
743
33.3%
7.14
7.24
55.7
12.1%
49.0
46.3
743
2,269
130
3,142
950
75
375
1,400
1,025
2,425
717
29.6%
8.62
7.65-7.95
116%
110%
55.7
12.1%
49.0
46.3
743
2,269
130
3,142
950
75
360
1,386
1,025
2,411
731
30.3%
8.62
7.70-7.90
7.90
113%
55.7
12.1%
49.0
46.3
743
2,269
130
3,142
950
75
360
1,385
1,040
2,425
717
29.5%
8.62
7.75-8.05
7.90
113%
56.0
17.0%
46.5
45.2
691
2,100
130
2,921
958
74
300
1,332
950
2,282
639
28.0%
8.78
7.00
7.05
146%
55.7
18.6%
45.4
44.8
717
2,034
120
2,870
955
75
250
1,280
1,050
2,330
540
23.2%
8.78
6.40-8.40
7.05
157%
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U.S. Winter Wheat Crop
Conditions: 2nd Week of April
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US Drought Monitor – 2013 vs 2012
Apr 10, 2012
Apr 09, 2013
Drought Severity
D0 - Abnormally Dry
D1 - Drought - Moderate
D2 - Drought - Severe
D3 - Drought - Extreme
D4 - Drought - Exceptional
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Global Wheat’s Weather Problems
Also Include Too Much Rain
“The Summer That Never Was in UK” Will
Boost UK’s Imports. Continued Rains Will
Reduce 2013 Area Seeded by 12-15%.
14 Mln Ha Affected by Flooding in Arg’s
Buenos Aires and Santa Cruz. How Much
Much Damage Did Wheat Crop Suffer?
Copyright
© 2012
AgResource Company.
All All
Rights
Reserved.
Copyright
© 2013
AgResource
Company.
Rights
Reserved.
Crops in Canada & U.S. N. Plains Will be
Planted Late Resulting in Lost Acres and
Reduced Yields
Approximate crop yield decline each day
Alberta crops’ seeding date is delayed
after May 1
Crop
Barley - grain
Barley - silage
Triticale - grain
Triticale - silage
Wheat – HRS
Wheat - durum
Canola
Flax
% Yield
decline/day
1.3
1.0
0.8
1.1
0.8
1.3
1.7
0.6
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2013 World Wheat Crop to be 2nd
Largest on Record.
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Big Crop Compensates for Small
Beginning Stocks.
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Per Capita Use Has Been Steady
Thanks, In Part, to EU Biofuels Use.
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More Wheat Fed Next Year But Trade
in “Feed Wheat” Will Be Down.
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No Growth in World Wheat Trade
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Despite Near-Record Crop, Global
Stocks/Use Will Slip in 2013/14.
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US SRW Now World’s Cheapest Wheat. But
Black Sea “New Crop Quotes” Less Than US.
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India Has More Wheat to Export But Will They Sell
At Prices Below The Govt’s Support Price?
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Wheat Prices Seem to be a Function of
Exporters’ Stocks/Use and Corn Price
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Lowest World Corn Stock/Use
Since 1974
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Chicago Wheat Nearing Largest
Net Short since 2006
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A Weekly Close Above The Downtrend
Line Signals to Hold Off on Further Sales.
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Downside Risk is $6.00/Bu Basis the
“Nearby” KCBT Futures History
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$.40/Bu “Carry” from Jul ‘13 to Mar ‘14
($.05/Bu/Month). Farmers With On-Farm
Storage May Want to Hedge in KWH14.
KC HRW 13% is 40-50 cents/bu > HRW Ord.
Problems with N. American Spring Wheat crop
could push up protein premiums.
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Why Are Wheat End Users (Traders) So
Calm?
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