10/13/05 USDA raises wheat price outlook

10/13/05 USDA raises wheat price outlook

Farm and Ranch October 13, 2005 The USDA Wednesday added 20 cents a bushel to both the low and high end of the range of its price forecast for wheat in the current marketing year compared to a projection made last month. That range is now $3.20 to $3.60 a bushel. This past season's average price was $3.40. A new supply and demand report reflecting the reduced U.S. production in the Small Grains Summary issued in late September also increased U.S. wheat exports, at least for hard red wheats. The result was a 94 million bushel cut in projected U.S. wheat ending stocks. Joe Victor of Allendale, Inc, says USDA also reduced its world wheat ending stocks projection. Victor: "Domestic end stocks to use for wheat is at 24.2%. That is very near identical to 24.2% last year. The good news again is that when we look at the world end stocks to use at 18.9% that is below last year's 20.7% and is identical to the 2003 crop when we did enjoy a good price rally in there." Victor says Kansas City December futures could go to $4 and Minneapolis December to the $4.20 level. He's not as excited about Chicago because of poor exports. Despite a reduced export forecast for white wheat, USDA's projection for white wheat ending stocks dropped 27 million bushels from a month ago to 89 million, which is still an increase over last year's 62 million bushels. I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.
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