By George Flaskerud, Crops Economist
North Dakota State University Extension Service

Production estimates were reduced from a month ago by 5 million bushels for durum and 82 million bushels for soybeans in the World agricultural supply and demand estimates report released by the USDA on Aug. 11. The spring wheat estimate was reduced by only 2 million bushels, while the estimate for corn was increased by 236 million bushels. The spring wheat and corn estimates came in at the high end of trade expectations, while soybeans came in at the low end. The estimate for durum was unchanged.

In the near future, a recovery of spring wheat prices to the highs seen earlier will depend on demand and weather conditions in the hard red winter wheat growing areas. Demand was not helped by the USDA's projections that 15 million bushels of domestic use was transferred from hard red spring to hard red winter and exports were left unchanged. On the other hand, the latest drought outlook through October shows that it is expected to persist or intensify in much of the hard red winter wheat area.

Durum prices will continue to depend on what happens in Canada, where dry conditions persist. Forty-one percent of the crop in Saskatchewan was rated good/excellent as of Aug. 8, according to Saskatchewan Agriculture and Food, and 42 percent fair. U.S. durum yields were reduced from 27 bushels to 25 per acre in North Dakota and from 25 to 17 bushels per acre in Montana. The decrease in production was offset by a reduction in domestic use.

The quality of the hard red winter wheat and hard red spring wheat crops appears to be very good, in general. The protein content of the hard red winter wheat crop is very high at 13.8 percent as of Aug. 4, compared with 12.2 percent for the 2005 crop average, according to U.S. Wheat Associates. The high protein will allow millers to get by with less of the crop than normal because they can stretch the limited supply through blending with soft red winter wheat. Early test results indicate a higher than average protein for the hard red spring wheat crop, too.

Protein premiums are suffering as a result of the higher protein. A premium was not being offered for 15 percent protein wheat, relative to 14 percent, in the 20-day-to-arrive bids on the Minneapolis Grain Exchange as of Aug. 10. The discount for 13 percent protein wheat was 10 cents.

Although all-wheat exports were left unchanged from a month ago, they will be supported by less competition from the European Union, where production was cut by 6.75 million metric tons. A decrease for Argentina was more than offset by increases for Russia and the Ukraine.

The seasonal average farm wheat price was projected by USDA to be $3.90 to $4.50 a bushel, up from $3.70 to $4.30 last month. The average was $3.42 last year and $3.40 two years ago.

The national corn yield was increased from 149 bushels per acre in the July report to 152.2 in August. Most of the production increase went to ending stocks, which equal 10.4 percent of total use versus 9.2 percent last month. The price projection was reduced by 10 cents across the range to $2.15 to $2.55. The price averaged $1.99 last year.

The national soybean yield was reduced from 40.7 bushels per acre to 39.6 bushels, which resulted in the 82 million bushel production decrease. In addition, the carryover from last year was reduced by 30 million bushels because of increased crushing and exports. Minor changes in total use for the 2006 crop resulted in a significant reduction in ending stocks, which are estimated to be 15 percent of total use, compared with estimates of 18.7 percent a month ago. The seasonal average price was left unchanged at $5 to $6. The average was $5.70 for the 2005 crop.

Production was reduced by 7 million bushels for barley and 3 million for oats. Feed levels were reduced by 5 million bushels for each, so ending stocks were little changed.

Dry edible bean production was projected to decrease from a year ago by 4.049 million hundredweight to 23.301 million. North Dakota's production also was projected to decrease, from 8.588 million to 6.3 million. Acres planted to navy beans increased by 43,000 in the U.S. and 28,000 in North Dakota. On the other hand, pinto bean planted acres decreased by 145,400 in the U.S. and 47,000 in North Dakota. Production estimates by class will be released in December.