U.S. wheat stockpiles at the end of the marketing year will be 2.1 percent higher than forecast last month as livestock producers feed less to animals, the Department of Agriculture said today in a report.
Inventories on May 31 will total 731 million bushels, the USDA said, up from 716 million forecast last month. Analysts surveyed by Bloomberg News were expecting 730 million, on average. About 360 million bushels will be fed to animals in the U.S. during the current season, down from 375 million forecast last month, the agency said. World stockpiles were also projected to rise.
“The whole uptick in carryout is from the reduction in feeding,” Ken Smithmier, a grains analyst at The Hightower Report in Chicago, which forecast stockpiles at 742 million bushels, said in a telephone interview.
Wheat futures on the Chicago Board of Trade have dropped 9 percent this year, partly on speculation that the U.S. crop will be larger than the 2.269 billion bushels the government is predicting, partly due to rain in the eastern Midwest. The May contract was down 0.8 percent at $7.0825 a bushel at 7:19 a.m. in Chicago.
Some livestock feeders have already switched back to corn or are planning to after wheat’s price premium jumped to 79 cents on April 8 from a discount of 11 cents less than a month earlier, Smithmier said. Many feedlots in parts of Texas and New Mexico may resume buying corn if they can find supplies as wheat’s premium increases, he said.
Global wheat stockpiles will total 182.26 million metric tons by May 31, up from last month’s forecast of 178.23 million, USDA data show. Analysts were expecting 178.82 million tons, on average.
To contact the reporter on this story: Tony C. Dreibus in Chicago at firstname.lastname@example.org
To contact the editor responsible for this story: Steve Stroth in Chicago at email@example.com