On May 10, USDA issued its first set of forecasts for 2019/20 in its World Agricultural Supply and Demand Estimates report. USDA expects global wheat production at a new record of 777 million metric tons (MMT) and exceeding expected use again as major global suppliers rebound from last year’s unfavorable growing conditions.
Droughts in the European Union (EU) and Australia last year cut production in both regions to 5-year and 10-year lows, respectively. Growing conditions in both regions are more favorable now and USDA expects total EU wheat production to rebound 12% from last year to 154 MMT.
Australian wheat production is expected to reach 22.5 MMT, up 23% year-over-year but still 3% below the 5-year average of 23.3 MMT.
USDA’s initial forecast for Russian production shows a 6% increase over last year’s 72.0 MMT to 77.0 MMT in 2019/20 and a small decline in export volume. Notably, SovEcon, a Russian consultancy pegs 2019/20 Russian wheat production closer to 83.0 MMT, 7% higher than USDA’s official estimate and 15% higher than last year’s total production, if realized.
World beginning stocks of 275 MMT paired with the forecast for increased production bring total supply in the new marketing year to a record 1,052 MMT. USDA says large supplies in 2019/20 will be met by increased global demand for feed wheat and food consumption. USDA forecasts total global domestic consumption will reach a record 759 MMT in 2019/20, compared to 738 MMT the year prior. Global trade, at 285 MMT, is 4% higher than last year and 5% higher than the 5-year average of 176 MMT.
USDA predicts U.S. wheat production in 2019/20 will total 51.6 MMT. Though down somewhat from last year, that volume and increased beginning stocks push U.S. exportable supplies up to 52.0 MMT, the largest in the world. As global trade and consumption continue to rise, the abundance and end-use versatility of U.S. wheat classes reaffirm the United States remains the world’s most reliable supplier of wheat.