Lower domestic wheat use spells higher global supply: USDA

“The increased stocks primarily reflect balance sheet revisions that lower 2011/12 domestic wheat use for several countries this month,”​ the USDA said in its April World Agricultural Supply and Demands Estimates (WASDE) report.

Rabobank said this decrease was predominantly due to reductions in Chinese wheat feeding, estimated to be down 3m tons for 2012/13.

“The data showed a diverging environment of historically low US supplies of grains and oilseeds in contrast to lower global demand – particularly from China.”​

The commodity analysts said this would likely cause neutral pricing over the short-term.

Production unchanged, trade set to be up…​

The USDA noted that wheat production remained, on the whole, unchanged. Wheat production in Morocco was up 0.5m tons, but down 0.2m tons in the EU with a lower reported output in the UK. Saudi Arabia production was also lowered 0.2m tons.

Global wheat trade is projected to be higher for 2012/13 – with forecasts for exports raised 2.6m tons.

Coarse grains – stocks pushed up by corn​

The USDA estimated that 2012/13 coarse grains stocks will be higher. Despite stock reductions anticipated for sorghum, barley and oats – the increase in corn stocks works to offset the balance, it said.

Production of course grains is forecast to be up with an estimated 1.1m ton increase in global production for 2012/13. Production is set to be up 1.5m tons in Brazil due to favourable growing season weather and up 1.4m tons in the EU.

The USDA’s full report can be found HERE​.