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September 6, 2016
Grain Market Outlook
perspective on how historically large World total wheat stocks and World wheat percent stocks‐to‐use
are, the 34‐year low in World wheat ending stocks of 128.7 mmt and at least a 57‐year low in percent ending
stocks‐to‐use of 20.9% S/U both occurred in MY 2007/08, the last major World wheat “short crop” marketing
year. The “large crop‐over supply” situation that exists in World and U.S. wheat markets continues to have a
strong prevailing negative influence on World wheat prices.
The broader “large supply – low price” situation in the World wheat market may be “masking” or “obscuring”
at least a couple of other significant issues. First, while the quantity of wheat available in the World is plentiful,
the available supply of high protein milling wheat is less so. This factor may help U.S. Hard Red Spring wheat
markets and other sources of moderate to high protein wheat in the U.S. and abroad. Second, while the
supply of wheat in World markets overall is growing, the supply of wheat in the “World Less China” is
projected to have “contracted” in “current crop” MY 2016/17 compared to a year ago to the tightest supply
situation since MY 2013/14.
It is likely that significant World wheat production problems and/or trade disruptions would need to occur in
coming months and early in year 2017 in order to have wheat prices recover significantly by spring‐summer
2017. Ongoing strength in the U.S. dollar exchange rate – although it has been weakening or “moderating” in
recent months – also is a serious negative factor that is limiting U.S. wheat exports, resulting in higher U.S.
wheat ending stocks and % ending stocks‐to‐use, and causing U.S. and Kansas wheat cash prices to fall sharply
– down to the marketing loan rate in most of Kansas.
USDA U.S. Wheat Supply/Demand Forecast for “Current Crop” MY 2016/17: The USDA projected 2016 U.S.
wheat plantings of 50.816 million acres (ma) – down 3.828 ma (‐7.0%) from 2015. The USDA also forecast
2016 harvested acres of 44.093 ma which would be down 3.001 ma (‐6.4%) vs 2015. Based on projected 2016
U.S. wheat yields of 52.6 bu/ac (up from 43.6 bu/ac in 2015), 2016 U.S. wheat production is projected to be
2.321 bb (vs 2.052 bb in 2015), with total supplies of 3.417 bb (up from 2.917 bb in “old crop” MY 2015/16),
and total use of 2.317 bb (up from 1.936 bb in “old crop” MY 2015/16).
Given these numbers, the USDA projected “current crop” MY 2016/17 ending stocks of 1.100 bb (vs 981 mb a
year ago), with percent ending stocks‐to‐use of 47.5% S/U (vs 50.7% last year). U.S. wheat average prices are
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projected to be in the range of $3.35 to $4.05 (midpoint = $3.70 /bu) – down from $4.89 /bu in “old crop” MY
2015/16 and $5.99 /bu in MY 2014/15. It is assumed by Kansas State University that these USDA projections
for “current crop” MY 2016/17 have an 80% probability of occurring.
Alternative KSU U.S. Wheat S/D Forecast for “Current Crop” MY 2016/17: As an alternative to the USDA’s
projection, one potential KSU‐Scenario for U.S. wheat supply‐demand and prices is presented for “current
crop” MY 2016/17 – and is given a 20% probability of occurring. Assuming the same 2016 acreage, yields,
imports, and production as USDA, as well as food and seed use, the alternative scenarios assumes a) higher
U.S. wheat exports (1.075 bb vs 985 mb by USDA), and b) lower feed and residual use (320 mb vs 330 mb by
USDA).
KSU “Higher Exports with Spring 2017 U.S. Wheat Development Problems” Scenario (20% probability) assumes
for “current crop” MY 2016/17: 2.321 bb production, 3.417 bb total supplies, 1.075 bb exports, 320 mb feed &
residual use, 1.396 bb ending stocks, 40.50% S/U, & $4.25 /bu U.S. wheat average price.
KSU U.S. Wheat S/D Forecasts for “Next Crop” MY 2017/18: Two alternative KSU‐Scenarios for U.S. wheat
supply‐demand and prices are presented for “next crop” MY 2017/18. These scenarios assume a 5% decline in
U.S. wheat planted and harvested acreage in 2017 (with a 7% decline for U.S. winter wheat, and no changes
for other spring wheat and durum wheat classes. These KSU projections also assume at least a continued
moderation in the value of the U.S. dollar during the “next crop” 2017/18 marketing year, with some
improvement in U.S. wheat exports as a result.
KSU Scenario A) “Trend Yield, Higher Exports” Scenario (65% probability) assumes for “next crop” MY
2017/18: 48.258 ma planted, 41.873 ma harvested, 47.0 bu/ac trend yield, 2.072 bb production, 3.287 bb total
supplies, 1.000 bb exports, 250 mb feed & residual use, 2.286 bb total use, 1.001 bb ending stocks, 43.79%
S/U, & $3.95 /bu U.S. wheat average price; and
KSU Scenario B) “Lower Yield, Average Exports” Scenario (35% probability) assumes for “next crop” MY
2017/18: 48.258 ma planted, 41.873 ma harvested, 43.6 bu/ac lower yield, 1.922 bb production, 3.137 bb total
supplies, 980 mb exports, 240 mb feed & residual use, 2.256 bb total use, 881 mb ending stocks, 39.05% S/U,
& $4.35 /bu U.S. wheat average price.
…
April 19, 2017
Grain Market Outlook
percent ending stocks‐to‐use (S/U) of 34.05% ‐ up from 34.0% last year, and from 30.85% two years ago –the
highest since MY 2005/06.
For a perspective on how historically large World total wheat stocks and World wheat percent stocks‐to‐use
now are, in MY 2007/08 the 34‐year low in …
December 30, 2016
Grain Market Outlook
tocks‐to‐use (S/U) of
34.1% ‐ up from 33.8% last year, and from 30.8% two years ago – up to the highest level since MY 2005/06.
For a perspective on how historically large World total wheat stocks and World wheat percent stocks‐to‐use
now are, in MY 2007/08 the 34‐year low in … major World wheat “short crop”
marketing year. The situation in MY 2007/08 compares to projections of 252.1 mmt ending stocks and 34.1%
ending stocks‐to‐use projected for “current” MY 2016/17. The “large crop‐over supply” situation that now
exists in World and U.S. wheat markets continues to have a strong prevailing negative influence on U.S. and
World wheat prices.
However, the broader large crop‐over supply‐low price” situation in the World wheat market may be “hiding”
at least a couple of other important market issues. First, while the quantity of wheat available in the World is
plentiful, the available supply of high protein milling wheat is less so. This factor may eventually help exports
of both U.S. Hard Red Spring (HRS) wheat (higher protein – good quality) and U.S. Hard Red Winter (HRW)
wheat (moderate protein – good quality) relative to World wheat export competitors. As evidence of this,
exports of U.S. HRW wheat have been occurring at the pace needed to meet USDA projections – helped by
both low purchase prices and acceptable protein and quality. This raises the outside possibility of improved
U.S. HRW prices in coming months. Second, while the supply of wheat in World markets overall has grown,
the supply of wheat in the “World Less China” is projected to have actually “contracted” or “diminished” in
“current crop” MY 2016/17 compared to a year ago – down to the tightest supply‐balances situation since MY
2013/14. If this “China factor” eventually leads to noticeably tighter available global supplies of exportable
wheat to occur in coming months, it could have a positive impact U.S. wheat market prices in Spring 2017.
Even so, given the broader World wheat market’s current focus – it is likely that significant World wheat
production problems and/or trade disruptions would need to occur in year 2017 in order to have wheat prices
recover significantly by spring‐summer 2017. Ongoing strength in the U.S. dollar exchange rate is a serious
negative factor that is limiting the competitive affordability of U.S. wheat exports. These factors have resulted
in higher U.S. wheat ending stocks and % ending stocks‐to‐use, and have caused U.S. and Kansas wheat cash
prices to fall sharply – down to and below the marketing loan rate in most of Kansas in fall / early winter 2016.
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USDA U.S. Wheat Supply/Demand Forecast for “Next Crop” MY 2017/18: On December 1, 2016 the USDA
released their preliminary Long Term Agricultural Projections to 2026, in which they projected 2017 U.S.
wheat plantings of 48.500 million acres (ma) – down from 50.154 ma in 2015. The USDA also forecast 2016
harvested acres of 41.100 ma which would be down from 43.890 ma a year ago. Trendline 2017 wheat yields
for 2017 are projected at 47.1 bu/a, down from the 2016 record of 52.6 bu/ac, while 2017 U.S. wheat
production is forecast to be 1.936 billion bushels (bb), down from 2.310 bb in 2015. Projected “next crop” MY
2017/18 total supplies are 3.199 bb (down from 3.410 bb in “current” MY 2016/17), with total use of 2.206 bb
(down from 2.267 bb in “current” MY 2016/17).
Given these numbers, the USDA projected “next crop” MY 2017/18 ending stocks of 933 million bushels (mb)
(vs 1.143 bb a year ago), with percent ending stocks‐to‐use of 45.0% S/U (vs 50.4% last year and 50.0% the
previous year). United States wheat average prices are projected to average $4.00 /bu – up from $3.70 in
“current” MY 2016/17, but down from $4.89 /bu in MY 2015/16 and $5.99 /bu in MY 2014/15. It is assumed
by Kansas State University that these USDA projections for “next crop” MY 2016/17 have a 50% probability of
occurring.
Three Alternative KSU U.S. Wheat S/D Forecast for “Next Crop” MY 2017/18: As an alternative to the USDA’s
projection, three potential KSU‐Scenarios for U.S. wheat supply‐demand and prices are presented for “next
crop” MY 2017/18. These scenarios assume lower 2017 U.S. planted (47.624 ma) and harvested (38.385 ma)
wheat acres than the USDA – due to larger than normal amounts of “graze out” and “crop switching” in 2017.
KSU Scenario 1) “Lower Acres, Trend Yield” Scenario (30% probability) assumes for “next crop” MY 2017/18:
47.624 ma planted, 38.385 ma harvested, 47.0 bu/ac trend yield, 1.804 bb production, 3.067 bb total supplies,
960 mb exports, 200 mb feed & residual use, 2.191 bb total use, 876 mb ending stocks, 39.98% S/U, & $4.00‐
$4.50 /bu U.S. wheat average price;
KSU Scenario 2) “Lower Acres, Trend Yield, +20% Exports” Scenario (10% probability) assumes for “next crop”
MY 2017/18: 47.624 ma planted, 38.385 ma harvested, 47.0 bu/ac trend yield, 1.804 bb production, 3.067 bb
total supplies, 1.152 bb exports***, 200 mb feed & residual use, 2.383 bb total use, 684 mb ending stocks,
24.10% S/U, & $5.25‐$5.75 /bu U.S. wheat average price;
KSU Scenario 3) “Lower Acres, Short Crop Yield” Scenario (10% probability) assumes for “next crop” MY
2017/18: 47.624 ma planted, 38.385 ma harvested, 43.6 bu/ac low yield***, 1.674 bb production, 2.937 bb
total supplies, 925 mb exports, 200 mb feed & residual use, 2.156 bb total use, 781 mb ending stocks, 36.22%
S/U, & $4.40‐$4.90 /bu U.S. wheat average price.
…
June 22, 2016
Grain Market Outlook
… Harvested of Planted
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Three KSU “Trend Yield” Scenarios (i.e., the KSU “Trend Yield – Moderate $USD” Scenario – 30%
probability, the KSU “Trend Yield – Foreign Crop Problems – Moderate $USD” Scenario – 15% probability, and
the KSU “Trend Yield – Fall 2017 Crop Problems – Moderate $USD” Scenario – 20% probability) with a
combined estimate of 65% probability of occurring assume that 2016 U.S. average wheat yields will be 46.0
bu/ac. This projection is a trend‐line forecast for year 2016 based on all yields over the 1973‐2015 time period.
For this KSU forecast of 2016 U.S. wheat yields to be true, lower yields will need to occur for spring wheat in
the northern states and for soft red winter wheat in the eastern Corn Belt – both being a distinct possibility
given the “high temperature” July‐August 2016 weather forecasts for the United States.
U.S. Wheat Production: The USDA forecast in its June 10th WASDE report – based on forecast 2016
planted acreage (49.559 ma), implicit harvested acreage (42.737 ma), and yield (48.6 bu/ac) – that 2016 U.S.
wheat production to be 2.007 billion bushels (bb) (Table 1 and Figure 7). This USDA forecast scenario of
2.077 bb is given a 35% probability of occurring by KSU estimates, and is up from 2.052 bb in 2015, and 2.026
bb in 2014, and within the 2004‐2013 range of 1.808‐2.512 bb (average = 2.128 bb, median = 2.135 bb).
By KSU projection estimates, there is a combined 65% likelihood of 2016 U.S. wheat production of U.S.
wheat of approximately 1.920 bb based on KSU acreage assumptions (i.e., 41.737 bb harvested acres and 46.0
bu/ac trend line yields) (Table 1).
U.S. Winter Wheat Production: In its June 10th NASS Crop Production report the USDA projected 2016
U.S. winter wheat production to be 1.507 bb – up 136.9 million bushels (mb) (+10.0%) from 1.370 bb in 2015,
and up from 1.377 bb in 2014, down from 1.543 bb in 2013, and down from 1.631 bb in 2012.
In this report, 2016 U.S. Hard Red Winter wheat production is forecast to be 938 mb in 2016, up 13.4%
from 827 mb in 2015 and up 26.9% from 739 mb in 2014. Soft Red Winter wheat production is forecast to be
355 mb in 2016, down marginally from 359 mb in 2015 and down 21.9% from 455 mb in 2014. White Winter
wheat production is projected to be 214 mb in 2016, down from 219 mb in 2015 and 224 mb in 2014.
Figure 6. U.S. All Wheat Yield (1973‐2015) and USDA 2016 Projection as of June 10, 2016 WASDE, with KSU
Long‐Term Trend Estimate for 2016
31.6
27.3
34.2
39.4
32.7
39.5 …
August 19, 2010
0%
100%
0%
1. 9 games
Recent Events, State by State
• Ballot … Christopher Wolf (MSU)
• Nov. 2007; 1,000 surveys in MI
– … increasingly
encouraged transition
• Implication: “Fighting …
April 29, 2016
Grain Market Outlook
o years ago – up to their
highest level in 14 years (since MY 2001/02). For perspective, the 34‐year low in World wheat ending stocks of
128.7 mmt and at least a 57‐year low in percent ending stocks‐to‐use of 20.9% S/U both occurred in MY
2007/08, the last major World wheat “short crop” marketing year.
The World wheat market continues to monitor a) potential wheat production problems in major world wheat
production areas such northwestern Africa, the Middle East, south Asia/India, China, South America, and
Australia, and the central and southern plains of the United States (possible wheat disease problems from
seasonal rains), b) ongoing geopolitical conflicts and tensions in the Middle East and the Black Sea region that
could impact commodity markets, and c) spillover impacts into grain markets and other commodities from
volatile World economies, and financial and currency markets. Even so, the “large crop‐over supply” situation
that exists in World and U.S. wheat markets continues to have a strong prevailing negative influence on World
wheat prices.
It is likely that significant World wheat production problems and/or trade disruptions would need to occur in
coming weeks and months in order to have wheat prices recover significantly before summer‐2016. Ongoing
strength in the U.S. dollar exchange rate – although it has been weakening recently – alos is a serious negative
factor that is limiting U.S. wheat exports, raising U.S. wheat ending stocks and % ending stocks‐to‐use, and
causing sharply lower U.S. wheat prices.
USDA U.S. Wheat Forecast for “Current Crop” MY 2015/16: The USDA made minor changes in its supply‐
demand and price projections for U.S. wheat in the “current crop” 2015/16 marketing year – with 2.052 billion
bushels (bb) production, 2.924 bb total supplies, 775 million bushels (mb) of exports, 140 mb wheat feed use
(down 10 mb), 1.948 bb of total use (down 10 mb), 976 mb ending stocks (up 10 mb), and 50.09% ending‐
stocks‐to‐use (up from 49.34% in March to the highest level since 48.6% in MY 2009/10). A price range of
$4.90‐$5.00 /bu was forecast by the USDA with a midpoint of $4.95 /bu – the lowest U.S. wheat marketing
year average price since $4.87 /bu in MY 2009/10.
USDA U.S. Wheat Forecast for “Next Crop” MY 2016/17: Based on March 31st USDA Prospective Plantings
Report forecasts and information from the USDA Agricultural Outlook Forum in Arlington, VA on February 25‐
26, 2016, a KSU‐adjusted USDA forecast of U.S. wheat supply‐demand is available for “next crop” 2016/17
marketing year beginning June 1, 2016. The USDA projected 2016 U.S. wheat plantings of 49.559 million acres
(ma) – down 5.085 ma from 2015. Forecast 2016 harvested acres of 42.174 ma would be down 4.920 ma vs
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2015. Based on projected 2016 U.S. wheat yields of 45.9 bu/ac (up from 43.6 bu/ac in 2015), 2016 U.S. wheat
production is projected to be 1.935 bb (vs 2.052 bb in 2015), with “next crop” MY 2016/17 total supplies of
3.036 bb (up from 2.924 bb in “current crop” MY 2015/16). With projected “next crop” MY 2016/17 ending
stocks of 943 mb and percent ending stocks‐to‐use of 45.05% S/U, U.S. wheat average prices are projected to
be $4.20 /bu – down from $4.95 /bu in “current crop” MY 2015/16. It is assumed by KSU that these adjusted
USDA projections for “next crop” MY 2016/17 is assumed to have a 40% probability of occurring.
KSU Forecast for “Next Crop” MY 2016/17: Three alternative KSU‐Scenarios for U.S. wheat supply‐demand
and prices are presented for “next crop” MY 2016/17, with each assuming the same 2016 planted acreage as
USDA, but 437,000 less acres harvested than the adjusted USDA estimates based on historical percent
harvested‐to‐planted acres relationships. A) KSU‐Scenario A (Trend Yield) (30% probability) assumes for “next
crop” MY 2016/17: 49.559 ma planted, 41.737 ma harvested, 46.0 bu/ac yield, 1.920 bb production, 3.021 bb
total supplies, 850 mb exports, 2.043 bb total use, 978 mb ending stocks, 47.87% S/U, & $4.05 /bu U.S. wheat
average price; B) KSU‐Scenario B (Foreign Crop Problems – Higher U.S. Exports) (15% prob.) assumes for
“next crop” MY 2016/17: 49.559 ma planted, 41.737 ma harvested, 46.0 bu/ac yield, 1.920 bb production,
3.021 bb total supplies, 1.050 bb exports, 2.243 bb total use, 778 mb ending stocks, 34.7% S/U, & $5.10 /bu
U.S. wheat average price; and C) KSU‐Scenario C (Widespread U.S. Crop Problems) (15% prob.) assumes for
“next crop” MY 2016/17: 49.559 ma planted, 41.737 ma harvested, 40.0 bu/ac yield, 1.669 bb production,
2.770 bb total supplies, 850 mb exports, 2.043 bb total use, 727 mb ending stocks, 35.6% S/U, & $5.00 /bu U.S.
wheat average price.
…
March 17, 2016
Grain Market Outlook
… Total Supply
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I‐G. U.S. Wheat Total Use & Use by Category
Food Use: The USDA forecast U.S. wheat food use of approximately 974 mb in “next crop” MY 2016/17,
following a consistent upward trend over time due to a) steady growth in the U.S. population, and b)
associated regular increases in domestic demand for processed wheat products. This estimated projected
amount of 974 mb in food use in “next crop” MY 2016/17 is up from 967 mb for “current crop” MY 2015/16,
958 mb in MY 2014/15, 955 mb in MY 2013/14, and 951 mb in MY 2012/13 (Table 1 and Figure 8).
Seed Use: The USDA forecast seed use of approximately 69 mb in “next crop” MY 2016/17, up from 66 mb
in “current crop” MY 2015/16, but down from 79 mb in MY 2014/15, 77 mb in MY 2013/14, and 73 mb in MY
2012/13 (Table 1 and Figure 8).
Exports: Projected U.S. wheat exports of 850 mb in “next crop” MY 2016/17 is up from 775 mb in “current
crop” MY 2015/16, but is down marginally from 854 mb in MY 2014/15. Total U.S. wheat exports of 775 mb in
“current crop” MY 2015/16 is the lowest amount in 45 years, i.e., since 610 mb in MY 1971/72 prior to the
“Russian Grain Deal” period of MY 1973/74 (Table 1 and Figure 8). Projections by KSU of “next crop” MY
2016/17 U.S. wheat exports are also 850 mb – equal to the USDA’s projection of 850 mb (Table 1).
The primary factors that have caused lower U.S. wheat exports in “old crop” MY 2014/15 and “new crop”
MY 2015/16 are a) the sharp increase in the value of the U.S. dollar relative to other World currencies – in
particular those of other major World wheat exporters, and b) prospects for fully adequate supplies of
competitive foreign wheat stockpiles for export trade purposes. That said, there are several factors that could
change the current “low export demand” situation for the United States, including 1) the uncertain impact on
World wheat trade in the future from ongoing geopolitical conflicts – such as those between Russian and
Ukraine and also in the broader Middle East, and 2) the potential for dry or adverse weather conditions in
other major World wheat production areas due to anticipated the “El Nino” or an “El Nino transition to a La
Nina” weather …
February 15, 2016
Grain Market Outlook
heir highest level in 14 years (since MY 2001/02). For perspective, the 34‐
year low in World wheat ending stocks of 128.7 mmt and at least a 57 year low in percent ending stocks‐to‐use
of 20.8% S/U both occurred in MY 2007/08, the last major World wheat “short crop” marketing year.
There are ongoing concerns in the World wheat market about a) potential wheat production problems and
supply prospects in Europe, northwestern Africa, parts of the Black Sea region, south Asia/India, and parts of
Argentina, b) geopolitical conflicts in the Middle East and the Black Sea region that could impact commodity
markets, and c) spillover impacts into grains and other commodities from volatile World economies, and
financial and currency markets. Even so, the “large crop‐over supply” situation currently existing in World and
U.S. wheat markets continues to have a strong negative influence on World wheat prices.
It is likely that significant World wheat production problems and/or trade disruptions would need to occur in
coming weeks and months in order to have wheat prices recover significantly before summer‐2016. Ongoing
strength in the U.S. dollar exchange rate also is a serious negative factor that is limiting U.S. wheat exports and
overall usage, raising U.S. wheat ending stocks and stocks‐to‐use, and causing sharply lower U.S. wheat prices.
USDA U.S. Wheat Forecast for “Current Crop” MY 2015/16: The USDA lowered projected U.S. wheat exports
and raised ending stocks by the same amounts in its supply‐demand forecasts for U.S. wheat in the “current
crop” 2015/16 marketing year – with 2.052 billion bushels (bb) production, 2.924 bb total supplies, 775 million
bushels (mb) of exports (down 25 mb), 1.958 bb of total use (down 25 mb), 966 mb ending stocks (up 25 mb),
and 49.34% ending‐stocks‐to‐use (up from 47.45% in January to the highest level since 48.6% in MY 2009/10).
A price range of $4.90‐$5.10 /bu was forecast by the USDA with a midpoint of $5.00 /bu – the lowest U.S.
wheat marketing year average price since $4.87 /bu in MY 2009/10.
USDA U.S. Wheat Forecast for “Next Crop” MY 2016/17: In their Agricultural Projections to 2025 the USDA
provided a forecast of U.S. wheat supply‐demand for “next crop” 2016/17 marketing year beginning June 1,
2016. The USDA projected 2016 U.S. wheat plantings of 53.0 million acres (ma) – down 1.644 ma from 2015.
Forecast 2016 harvested acres of 44.9 ma would be down 2.194 ma vs 2015. Based on projected 2016 U.S.
wheat yields of 45.9 bu/ac (up from 43.6 bu/ac in 2015), 2016 U.S. wheat production is projected to be 2.060
bb (vs 2.052 bb in 2015), with KSU‐adjusted MY 2016/17 total supplies of 3.151 bb (up from 2.924 bb in
“current crop” MY 2015/16). With “next crop” MY 2016/17 total use of 2.168 bb, and KSU‐adjusted ending
stocks of 983 mb (45.34% S/U), U.S. wheat average prices are projected to be $4.40 /bu – down from $5.00
/bu in “current crop” MY 2015/16.
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KSU U.S. Wheat Forecast for “Next Crop” MY 2016/17: Compared to the USDA forecast, Kansas State
University (KSU) forecasts for “next crop” MY 2016/17 are a combination of lower 2016 wheat planted and
harvested acres, trendline yields, lower production and total supplies, lower exports and feed use, higher
ending stocks and percent ending stocks‐to‐use, and even lower prices. The KSU forecast is based on 2016 U.S.
wheat plantings of 50.695 ma – down 3.949 ma from 2015. Forecast 2016 harvested acres of 43.690 ma would
be down 3.404 ma vs 2015. With projected trendline yields of 46.0 bu/ac (nearly equal to the USDA’s 2016
forecast), 2016 U.S. wheat production is projected to be 2.010 bb (down from 2.052 bb in 2015), with MY
2016/17 total supplies equaling 3.101 bb (down 50 mb from the USDA projection).
With forecasts of exports at 850 mb (down 50 mb from USDA but still up from 775 mb in “current crop” MY
2015/16) and feed and residual use of 150 mb (down 75 mb from USDA but equal to “current crop” MY
2015/16), “next crop” MY 2016/17 total use of 2.043 bb is forecast, and projected ending stocks of 1.058 bb
(51.79% S/U). Based on historic price relationships, U.S. wheat prices are projected to be $4.25 /bu – down
$0.25 from the USDA’s projection of $4.40 /bu in “next crop” MY 2016/17, and down from $5.00 /bu in
“current crop” MY 2015/16, $5.99 in MY 2014/15, $6.87 in MY 2013/14, and the record $7.77 in MY 2012/13.
I. U.S. Wheat Market Situation & Outlook
I‐A. February 9, 2016 USDA WASDE Report
On February 9th the USDA World Agricultural Outlook Board (WAOB) released its February 2016 World
Agricultural Supply and Demand Estimates (WASDE) report – with U.S. and World wheat supply‐demand and
price projections for the 2013/14, “old crop” 2014/15, as well as the “new crop” 2015/16 marketing years.
The “new crop” 2015/16 marketing year for U.S. wheat runs from 6/1/2015 through 5/31/2016.
I‐B. CME Kansas Hard Red Winter Wheat MARCH & JULY 2016 Futures
Since a low of $4.51 ¾ on January 4, 2016, MARCH 2016 Chicago Mercantile Exchange (CME)
Kansas hard red winter wheat futures prices traded up to a high of $4.81 ¾ on January 13th, but have
since declined to a close of $4.42 ¼ on Tuesday, February 9th, and $4.42 ½ on Friday, February 12th
before closing at $4.44 ¼ on that same day (Figure 1).
Figure 1. MARCH & JULY 2016 CME Kansas Wheat Futures Price Charts …