There’s not much excitement in wheat,” said Tim Hannagan, grain analyst with Alaron Trading, during a press briefing at the Chicago Board of Trade.

“USDA trimmed every variety of wheat we had as expected. But as always, wheat is not priced on supply. It’s priced on quality. And the quality of the U.S. crop is very poor. It’s coming in with the worst quality rating in history.”

USDA estimated U.S. winter wheat production at 1.749 billion bushels, down from 2001’s total of 1.958 billion bushels. Production was 60 million bushels, or 5 percent, below last month’s figure due to lower yields, 39.6 bushels, and reduced area, 29.8 million acres.

Estimated ending stocks for wheat is 520 million bushels, down from last month’s estimate of 555 million bushels and down from last year’s 758 million bushels.

The lower ending stocks were the result of lower production more than offsetting reduced domestic use and higher reported carryin stocks.

The numbers had Don Roose, president and CEO, U.S. Commodities Inc., thinking bullish. “The big winner on this report was the wheat market. World wheat ending stocks at 147 million metric tons is the number that really jumps out at you.

“In 1995-1996, our ending stocks were just under 146 million tons (when prices rose). So there’s little room for adversity as we look at production problems in China, Argentina and Canada. So we’re going to watch the weather real close over there.”

But Hannagan stressed that poor quality would dampen any price enthusiasm.

“Our wheat is not suitable for the world market right now,” Hannagan said. “I look for the demand for wheat after spring harvest to fall significantly and cash prices are going to be softer regardless of the supply. The quality just isn’t there. There are much better French, Australian and European qualities. We’re going to lose the lion’s share of the business elsewhere.”

Worldwide, USDA reduced Argentine wheat production by 2.5 million tons, as financial constraints will prevent farmers from planting as much as expected earlier. Wheat crops in China, India, Canada and Romania wheat crops are down.

Projected world ending stocks were reduced sharply from last month to the lowest level since 1997/98.