For wheat, the USDA projects a 3 percent increase in world production, well below the record levels of 2008-09 and 2009-10. Year-over-year increases are expected in India, Russia, Ukraine, Kazakhstan, Europe and Canada, he said.

Good said that the largest decline is expected in the United States. The National Agricultural Statistics Service (NASSA) forecasts the U.S. winter wheat crop at 1.424 billion bushels, 61 million bushels smaller than the 2010 crop.

Based on planting intentions and trend yield, the spring wheat crop is expected to total 619 million bushels, 104 million smaller than the 2010 crop. “Production is still very uncertain due to drought conditions in some hard red winter wheat areas and delayed planting in some spring wheat areas,” he said.

The USDA projects a 50-million-bushel increase in wheat feeding this summer and a 225-million-bushel reduction in wheat exports during the year ahead. Year-ending stocks are expected to decline from 839 million bushels on June 1, 2011, to 702 million bushels on June 1, 2012, Good said.

The 2011-12 marketing year average price is projected in a range of $6.80 to $8.20, compared to an average of $5.65 for the year just ending. Much of the 2010 crop was sold before prices moved sharply higher, he noted.

“World soybean production is expected to be record large in 2011-12 (0.5 percent larger than the 2010-11 crop), although the U.S. crop is just being planted and the South American crop will not be planted for several months. Soybean consumption in China is expected to increase by 8 percent, and world stocks are expected to decline modestly by the end of the 2011-12 marketing year,” he said.

Based on March planting intentions and a trend yield, the 2011 U.S. soybean crop is projected at 3.285 billion bushels, 44 million bushels smaller than the 2010 crop. Consumption is expected to be 15 million bushels less than during the current year, resulting in a 10-million-bushel year-over-year decline in year-ending stocks, Good said.

“The 2011-12 marketing year average price is projected in a range of $12.00 to $14.00, compared to an average of $11.40 for the current year,” he added.

Early projections of adequate U.S. and world supplies at current price levels resulted in price weakness following the release of the USDA report. “Now the market will monitor crop development to see if the projections materialize,” he said.