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WASD - Wheat

Jun 12, 2012

WHEAT: Projected U.S. wheat supplies for 2012/13 are lowered 51 million bushels with

reduced carryin and lower forecast winter wheat production. Beginning stocks are lowered

40 million bushels with a 10-million-bushel increase in food use and a 30-million-bushel

increase in exports for 2011/12. The increase in 2011/12 food use reflects higher-thanexpected

flour milling during the January-March quarter as reported by the North American

Millers’ Association. Exports are increased based on the strong pace of U.S. shipments

during the final weeks of the old-crop marketing year.

U.S. all wheat production for 2012/13 is projected at 2,234 million bushels, down 11 million,

with lower forecast winter wheat production and small reductions in forecast durum wheat

production for Arizona and California. Winter wheat production is forecast 10 million bushels

lower with reductions for Hard Red Winter (HRW) and Soft White Winter wheat. The largest

production declines are in the HRW states of Nebraska and Colorado, but higher production

for Oklahoma is partly offsetting. With reduced supplies and higher expected prices, feed

and residual use is lowered 10 million bushels. Ending stocks for 2012/13 are projected 41

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

raised 10 cents on both ends to $5.60 to $6.80 per bushel. This remains well below the

record $7.25 per bushel projected for 2011/12.

Global wheat supplies for 2012/13 are lowered 7.0 million tons with beginning stocks lowered

1.5 million tons and world production expected down 5.5 million tons. Higher 2011/12 global

consumption, fueled by increased global trade, reduces carryin for 2012/13. World

production for 2012/13 is lowered reflecting reduced crop prospects in several exporting

countries including Russia, EU-27, Turkey, and the United States. Russia production is

reduced 3.0 million tons due to a continuation of spring dryness in key winter wheat

producing areas and indications of crop development problems resulting from winter freeze

damage. EU-27 production is reduced 1.0 million tons with reduced acreage in Germany,

Poland, and Spain, only partly offset by higher expected yields in France and Bulgaria.

Production is also lowered 1.0 million tons for Turkey as winter frost damage and disease

problems reduce yields across the central growing areas on the Anatolia Plateau. Output is

reduced 0.2 million tons for Syria as yield prospects decline for non-irrigated wheat in the

country’s northeast.

Global wheat consumption for 2012/13 is lowered 4.6 million tons with reduced prospects for

wheat feeding and food use. Wheat feeding is lowered for EU-27, Russia, and Turkey.

Larger corn supplies and increased corn feeding more than offset the reduction for EU-27.

Wheat food use is lowered for India, Bangladesh, and Indonesia. Increases in food use for

Morocco and Turkey are partly offsetting. Global wheat exports are reduced 1.6 million tons

WASDE-507-2

with a 2.0-million-ton reduction for Russia and 0.3-million-ton reductions for both Argentina

and Turkey. India exports are raised 1.0 million tons as market conditions improve the

competitiveness of private exports. World ending stocks for 2012/13 are projected at 185.8

million tons, down 2.4 million from last month.

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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