The USDA’s November WASDE forecasts for MY 2016/17 Worldwide Wheat production will expand to 744.72 Million Metric Tons, up +1.3% from the previous marketing year and `fractionally above the prior month’s forecast. Worldwide Wheat trade is expected to expand to 174.23 MMT. We find it is interesting the Russia is now forecast to be the world’s largest Wheat exporter in 2016/17 at 30.0 million Metric Tons. Russia and Former Soviet countries have sharply expanded Wheat Production in recent years and are likely seeking to expand their Wheat exports by price discounting.
Given the expanding Worldwide Wheat production for MY 2016/17, Wheat feeding to the livestock/poultry sector is forecast to increase to 146.89 MMT, an expansion of +6.1% above the prior year. US livestock producers are forecast to feed 8.98 MMT of Wheat; this is forecast to be 171.4% of the prior year. US farm level Wheat prices are forecast to decline for MY 2016/17 to range from $3.35 – $4.05, this is a decline of about -25% of a year ago level. Wheat Prices are now quite competitive with Feed grains in a number of locations. Most of the Wheat feeding in the U.S. occurs during the summer quarter after winter wheat harvest but before New Crop Corn harvest.
The US is now expected to hold an expanding proportion of the World’s Ending Wheat stocks for MY 2016/17 going to 12.5% vs 9.4% the previous year. This suggests some world’s Wheat producers will price their Wheat into domestic or export channels; as a result, the US will be forced to hold an increasing share of the World’s Ending Wheat stocks. US livestock producers are also expected to expand their Wheat feeding to Livestock and Poultry.