The biggest changes to the supply and demand balance sheet for U.S. wheat in last week’s World Agricultural Supply and Demand Estimates (WASDE) were in the 2010-2011 marketing year that ended May 31. USDA decreased wheat imports by 10 million bushels lowering the supply total and increased exports by 20 million bushels on the use side. The net effect was a decrease in 2010-2011 ending stocks (2011-2012 beginning stocks) of 30 million bushels.

The production estimate for the 2011 wheat crop is up 15 million bushels from May, somewhat of a surprise given the drought impacting hard red winter wheat and flooding preventing planting of the spring crop. USDA raised its yield estimate for winter wheat from 44.5 bu. in May to 45.3 bu. The all-wheat average went from 42.5 bu. to 43.1. The wheat use categories for 2011-2012 were unchanged from May, with domestic use at 1.24 billion bushels and exports at 1.05 billion.

World wheat supplies were unchanged from the May WASDE with a 5-million-metric-tons (mmt) increase in beginning stocks, offsetting a 5 mmt decrease in production. World wheat use was decreased by 3 mmt, raising ending stocks by a like amount. Measured by “days of use on hand” at the end of the marketing year, world wheat supplies increased from 99 days in May to 101, just below the 20‐year average of 105 days.

USDA left exports from the FSU‐12 unchanged, already accounting for the lifting of the Russian export ban, but raised its estimate of carryover stocks in the former Soviet Union by 5 mmt. Production in Europe is down 7 mmt due to drought, especially in the top producing countries of France and Germany. For the 2011-2012 marketing year, the EU‐27 is expected to keep its top position in wheat production and the FSU‐12 once again challenge the U.S. as the top exporter.