USDA Outlook: Wheat

EU-27 production is lowered 1.7 million tons as persistent, heavy rain during
harvest reduces yield prospects in France and Germany, and persistent drought
and heat reduce yield prospects in Bulgaria, Hungary, and
Romania.

Production for Canada is projected 1 million tons lower as hot,
dry weather in July reduced prospects for spring wheat in Alberta and
Saskatchewan.

Output for Turkey and Brazil is lowered, respectively, 0.5
million tons and 0.2 million tons.

Production in India is raised 1.19
million tons in line with official government estimates.

FSU-12 output is
raised 1.25 million tons with harvest results indicating higher-than-expected
winter wheat production in Ukraine, and July precipitation increasing yield
potential for spring wheat in Russia and Kazakstan.

US
projections
Projected US 2007/08 ending stocks are down 14 million
bushels reflecting lower production. Winter wheat production is lowered 25
million bushels, partly on lower harvested area in Kansas. Spring wheat
(including durum) production is nearly unchanged.

Feed and residual use
is projected 35 million bushels lower as increased hard red winter wheat
abandonment reduces supplies of feed wheat and higher prices make feeding less
attractive.

Exports are raised 25 million bushels as reduced world
supplies boost prospects for US wheat exports and prices.

The
season-average price is projected at $5.10 to $5.70 per bushel, up 30 cents on
each end of the range from last month.

Global wheat
traffic
World imports and exports for 2007/08 are both increased this
month. Most of the 0.7-million-ton increase in world imports results from an
increase of 0.5 million tons for EU-27. With lower production, EU-27 is expected
to import more wheat.

World exports are projected 1.2 million tons higher
with increases for the United States, Russia, and Australia. Exports for Russia
and Australia are projected up 0.5 million tons each, more than offsetting a
0.5-million-ton reduction for EU-27.

Lower production and increased
consumption contribute to a reduction in projected global ending stocks, down
1.8 million tons from last month.

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