Excerpt from The Wheat Situation: June, 1958

Domestic disappearance for 1958-59 is now estimated at 593 million bushels, slightly above 1957 - 58 because of a small increase likely in feed ing. Exports are assumed at 375 million bushels, which is somewhat below those of 1957 - 58 because of favorable crop prospects in Europe. This would leave a carryover July 1, 1959 of about million bushels, a new high record and over 300 million bushels above the estimated carryover this July.

Analysis of prospective supplies and distribution by classes indicates continued very large supplies of hard red winter wheat and abundant supplies of hard red spring wheat. Supplies of durum should more than meet domestic requirements. Supplies of white wheat and soft red winter will be large enough to provide liberal exports.

The seasonal decline in U. S. Wheat prices is likely to be greater than usual this year because (1) the crop is considerably larger than antici pated domestic use and exports, (2) the price support rate has been reduced and (3) production on farms not eligible for price support is unusually large. Support for the 1958 crop will likely be adjusted upward a few cents from the advance minimum rate announced at because of an increase in the parity price. The support price last year was per bushel.

As in recent years, prices are expected to strengthen after the heavy movement slackens, following harvest. Prices of hard red winter wheat, however, may not strengthen as much as usual. Free supplies are expected to continue large during the 1958 - 59 marketing year due to unusually large production of this class of wheat on farms which are not in compliance with acreage allotments. Wheat on such farms is not eligible for price support and will be sold on the open market following harvest unless it is stored for future sale.

Prices of other classes of wheat probably will not be strong enough to offset the relatively weak hard red winter wheat prices and, as a result, the U. S. Average price to farmers may be relatively low this year compared with the national average support level. During the 5 years, 1952-56, prices to farmers averaged 10 cents below the announced support rate. However, in 1953 - 5h, when the price situation probably was somewhat more favorable than this year, the price to growers averaged 17 cents below the announced rate.

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