The US harvest of soft red winter wheat, the type traded in
Chicago, will tumble by 23% this year, millers believe, implying that stocks
may struggle to rebuild far from six-year lows.
The North American Millers Association forecast this year's
US soft red winter wheat harvest at 437.0m bushels, down from the 564.9m
bushels produced in 2013.
The decline contrasts with a small rise in production, by 1.4% to 2.16bn bushels, that the US Department of Agriculture foresees for the overall domestic wheat harvest this year.
The drop is also bigger than the 16% decline in sowings for this year's crop, reflecting
the lateness of the corn and soybean harvests last year, in turn down to delays
to spring sowings. Soft red winter wheat is grown largely in Midwest states
such as Illinois and Michigan.
'Conditions are down'
However, the association raised concerns of winterkill on this year's
crop, following the harsh US winter, in contrast to the benign conditions which last year resulted in an unusually high yield, of 63.7 tonnes per acre, with the proportion
of plantings making it to harvest, at nearly 89%, elevated too, on USDA
Although soft red winter wheat seedlings are not thought to have suffered as badly as hard red winter wheat from the cold, the USDA has warned that "conditions are down from the past few year".
The proportion of Illinois wheat rated in "good" or "excellent" condition as of the end of February was 54%, down from 69% a year before.
Large swings in US production of soft red winter wheat are
not uncommon, depending on conditions and the appeal of alternative crops, with
output tumbling by 34% in 2009 and by a further 41% the following year.
However, unlike in those years, the fall in production hopes
this time comes when US inventories of soft red winter wheat, or SRW, are at
modest levels by recent standards.
The USDA foresees stocks ending 2013-14 at a six-year low of
112m bushels, with supplies from a strong harvest of 565m bushels drained in
particular by strong exports, forecast at 305m bushels, by far the highest in
at least 20 years.
The average demand for US soft red winter wheat over the
previous five years is 441m bushels, in line with the association's production
However, the association was more upbeat on forecasts for
soft white winter wheat, or SWW, which is an alternative for soft red winter
wheat in some baking uses, but grown largely in north western states Idaho,
Oregon and Washington.
The soft white winter wheat crop was forecast at 232.7m
bushels, a rise of 9% from last year's 214.1m bushels - reflecting a 12%
increase in the north west, offset by a 6% drop forecast for Michigan's production.
The USDA has forecast winter plantings of white wheat overall,
including some hard white wheat, at 3.39m acres, down 3% year on year.
The overall white winter crop last year reached 268.5m
bushels, on USDA forecasts.