CHICAGO (B)--The U.S. Department of Agriculture's attache in Beijing reports minimal dryness effects on the Chinese 2000-01 wheat crop.

Last fall's planting and emergence appear to have gone well and moisture levels in the early spring growing season were good, reported the attache, who maintained a forecast of Chinese wheat production at 107 million tonnes.

In a report dated June 8, the attache said precipitation levels were comparable to a year ago, when yields were favorable. However, the 2000-01 crop will be down significantly from 1999 as lower prices discouraged farmers from planting as much. The attache's forecast was unchanged from an earlier version, but up from the 104 million forecast Friday by USDA. The attache's crop forecast marks a drop of almost 7 million tonnes from a revised 1999-2000 crop of 113.88 million (previously 115.0 million).

The downward reduction to China's old-crop production in turn lowered 1999 ending stocks as well as the current year's ending stock estimate.

The 2000-01 wheat ending stocks forecast was 16.242 million tonnes, down from 20.221 million as expected earlier and down from 24.742 million in 1999-2000. The attache noted an increase in value-enhanced wheat, as the production of high-gluten wheat varieties climbed to 15% from 2% last year. The new high-gluten Chinese varieties may lower the need for the imported high-gluten, high-protein hard wheat which Chinese millers currently use.

Millers say there are limits to how much the high-gluten Chinese wheat can be used as a substitution for the imported hard wheat. However min the future imports may be reduced by blending more of the domestic high-gluten wheat, officials said.

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