U.S. wheat stockpiles before next year’s harvest will be smaller than the government’s earlier forecast after drought and unusually cold weather damaged winter varieties in the southern Great Plains, government data show.
Inventories of all wheat varieties as of June 1, 2014, will total 659 million bushels, the U.S. Department of Agriculture said today in a report. That’s more than the 655 million projected by analysts in a Bloomberg survey and less than the 670 million the government forecast in May. U.S. output will drop this year from 2012 to 2.08 billion bushels, compared with last month’s prediction of 2.057 billion.
The worst U.S. drought since the 1930s last year hurt winter-wheat crops that were planted before November, followed by freezes and more dry weather in March and April. Just 31 percent of the crop was in good or excellent condition as of June 9, the lowest rating for that time of year since 2006, USDA data show.
“It’s the hard-red winter where the reductions are coming, in the areas where the conditions were cut back,” Larry Glenn, an analyst at Frontier Ag in Quinter, Kansas, said in a telephone interview before the report.
Wheat futures through yesterday fell 10 percent on the Chicago Board of Trade this year, after entering a bear market in January with prices down 26 percent from a high in July.
In a separate report, the USDA forecast production this year of hard-red winter wheat, sown in the southern Great Plains and used to make bread, at 781 million bushels. Output of soft-red varieties, grown in the eastern Midwest and used in cookies and cakes, will total 509 million bushels, according to the USDA.