This changing perception is one reason to be very cautious when you read that stocks are at historic lows. Stocks may be at historic lows, and some would say you could still define world stock levels today with that language. But a more important issue is how will the market respond to those stocks levels. So having said all that, here is where ending stocks are headed this year. Put yourself in the shoes of wheat buyers.
Buyers can wait for lower prices to fill their wheat needs.
White wheat ending stocks are forecast to be up 8 million bushels to the highest white wheat stocks level in 4 years. The 67 million bushels predicted to be around by May 31,1998, is up 12 million bushels from May, 1996. Not only will the US government not be purchasing surplus wheat, several other governments around the world have adopted the same policy, meaning the affect of supply and demand is more likely to play itself out in the market. Prior to the late 1970's the US averaged about 33 percent of world stocks. Last year we held about 10 percent of the world's stocks and that will rise this year to about 13.4 percent of the world's ending stocks.