U.S. Wheat Inventory Estimate Cut as Feed Use IncreasesTony C. Dreibus
U.S. wheat inventories at the end of the marketing year on May 31 will be 3.5 percent smaller than forecast in January and lower than analysts expected on higher expected feed use, the U.S. Department of Agriculture said.
Stockpiles will total 691 million bushels (18.82 million metric tons), down from 716 million estimated a month ago and less than 743 million a year earlier, the USDA said today in a report. The average expectation of 29 analysts was 717 million bushels. About 375 million bushels will be used in animal feed, up from 350 million forecast in January, USDA data show.
“Corn supplies are going to be so tight that they could be forced into feeding wheat” to cattle on feedlots in the Great Plains, Larry Glenn, an analyst at Frontier Ag in Quinter, Kansas, said by telephone. “They’re pulling corn out of Nebraska to southwest Kansas. It shows how tight supplies really are when they pull it from that far away.”
Wheat futures for March delivery slid less than 0.1 percent to $7.5475 a bushel at 11:54 a.m. on the Chicago Board of Trade. The price through yesterday was down 2.8 percent this year.
Wheat futures on the Kansas City Board of Trade were at a 78.25-cent-per-bushel premium to corn traded in Chicago on Feb. 5, the lowest since Aug. 2. When the spread between the grains narrows, some cattle feeders in parts of Kansas, Oklahoma and Texas will add wheat to animal rations, Glenn said.
World inventories at the end of the year will be 176.73 million metric tons, up from the month-earlier estimate of 176.64 million, the USDA said. Global production is expected to total 653.61 million tons, down from 654.31 million forecast in January, according to the report.
In the U.S., wheat is the fourth-largest crop, valued at $14.4 billion in 2011, behind corn, soybeans and hay, government data show.