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If wheat's displacing corn as feed now, what'll happen when biotech wheat arrives?

(Thursday, April 3, 2003 -- CropChoice news) -- Editor's note: On the following DTN story, one might want to consider how much more wheat will displace corn as feed if genetically modified wheat is introduced and is rejected in major export markets. That wheat would likely stay here and be fed to the cows and other livestock.

OMAHA (DTN) -- The March grain stocks report suggested that corn feed use was greater than anticipated, leading some analysts to question whether the increase in corn feed use will continue for the remainder of the year, KSU ag economist Bill Tierney told DTN today.

In the March report, corn stocks totaled 5.13 billion bushels, down 11% from the previous year.

"While it's possible that corn feed use will exceed expectations over the next quarter (Mar-May), corn will likely face increased competition from wheat during the summer quarter (Jun-Aug)," Tierney explained.

At the February Ag Outlook Conference, USDA projected that 2003 wheat feeding will increase by 125 million bushels. Most wheat feeding takes place in the summer just at the time when wheat supplies are largest, corn supplies are limited, and wheat prices tend to reach their seasonal lows.

Since reaching a peak in September, national average wheat prices have dropped steadily relative to national average corn prices, Tierney said, commenting on a chart he prepared for DTN showing the ratio. "Based on the current ratio of CBOT July wheat/July corn futures, it appears that further declines in the ratio of national average wheat/corn prices is likely," he added.