What does the USDA Expect From Wheat?

Ag economics 101 says if you lower the prospects for an export commodity, increasing the year-ending stock, you usually have to lower the price forecast.  How about the latest forecasts for wheat from the USDA?  According to USDA Outlook Board Chair Seth Meyer, exports down 25-million bushels, carry-out is up 25 million bushels, and prices are up a nickel.  He said the new price forecast for this marketing year is $4.65 a bushel.

"Part of this is a price rise, bidding to keep some of that wheat home, instead of sending it oversees."

Because of worries about this current winter wheat crop, Meyer said there are many questions,

"Is there winter kill? Is there Dry Net? What's this crop going to look like? So this is all a price rally to ration demand. You're going to keep a little bit of that in stock...to carry it into the next year, because you might have concerns about next year's crop."

Meyer said wheat prices have been rallying for going on 12 weeks and exports have slowed as well.

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