Global production for 2014/15 is down slightly, but still a record, as smaller crops in Australia, Egypt, and Kazakhstan are only partially offset by larger crops in the EU (mostly in Poland, Germany, Romania and Spain). Global trade is down on import cuts for China, Egypt, Pakistan, Russia, and South Korea. Brazil, Kazakhstan, and Mexico are boosted but do not compensate for the overall decline. U.S. exports and imports are unchanged. The season-average farm price is unchanged.

Wheat exporter ending stocks in 2014/15 are forecast up year-to-year on record global production, putting pressure on prices. The EU is the largest driver of rising stocks based on a record crop, quality concerns, and intensified competition, particularly from Russia. Despite record exports, Russian stocks are projected up on a bumper crop. Ukraine's stocks are expected to rise significantly as its major market for feed-quality wheat, the EU, has an abundant supply of lower-priced feed grains. Ukraine is also facing competition from lower-priced corn in other markets. U.S. stocks are forecast higher because of competition from other exporters and larger supplies in South America. By contrast, Canada's stocks are projected to decline based on tighter supplies, while Australia and Kazakhstan are nearly unchanged.

U.S. PRICES:

Prices for most wheat classes rose in October. Soft White Winter (SWW) spiked $21 to $276/ton as supplies tighten. Soft Red Winter (SRW) climbed $14 to $254/ton and Hard Red Winter (HRW) rose $3 to $285/ton. Hard Red Spring (HRS) dropped just $2 to $367/ton, but remains elevated.

TRADE CHANGES IN 2014/15

Selected Exporter

• Australia is down 1.0 million tons to 18.0 million based on lower production.

Selected Importers

• Brazil is raised 500,000 tons to 7.0 million because of crop quality concerns in some regions.

• China is reduced 300,000 tons to 1.7 million due to the slow pace and expectations that the tariff-rate quota for the private sector will not be expanded.

• Egypt is slashed 800,000 tons to 9.5 million because changes to its bread subsidy program are expected to cut consumption and reduce waste considerably.

• South Korea is lowered 400,000 tons to 3.8 million because of reduced purchases of feed-quality wheat.

• Mexico is raised 300,000 tons to 4.6 million on a smaller crop and the strong early-season pace of shipments.

• Pakistan is down 300,000 tons to 700,000 because the Government implemented a 20 percent import duty to stem the influx of lower-priced imports.

• Russia is cut 300,000 tons to 200,000 due to lower supplies in Kazakhstan. Russia imported significant quantities of wheat from Kazakhstan over the previous 3 years