WASDE Wheat: Higher U.S. Production Outweighs Increased Use

Wheat harvest. Photo: Rome Ethredge

The outlook for 2019/20 U.S. wheat this month is for greater supplies, increased use and higher ending stocks. U.S. wheat production is raised 59 million bushels to 1,980 million on increased winter wheat and other spring wheat production as indicated by the NASS August Crop Production report.

Estimated food use for the 2018/19 market year is lowered 5 million bushels to 955 million based on the latest NASS Flour Milling Products report. Food use for the 2019/20 market year is also lowered 5 million bushels to 960 million. Feed and residual use is raised 20 million bushels to 170 million on greater wheat supplies and more competitive prices.

Projected 2019/20 U.S. wheat exports are raised 25 million bushels to 975 million on lower exportable supplies from key competitors, notably the EU, Kazakhstan, and Russia. Ending stocks for 2019/20 are raised 14 million bushels to 1,014 million, down 5 percent from the previous year.

The season-average farm price is lowered $0.20 per bushel to $5.00 on updated NASS prices, lower U.S. corn prices, and reduced wheat price expectations for the remainder of the market year.

Foreign 2019/20 wheat supplies are reduced 4.5 million tons, primarily on lower production in several major competing exporters. The production declines are led by a 2.0-million-ton reduction for Turkey on both an updated harvested area estimate as well as a lower yield.

EU, Kazakhstan, and Russia are lowered 1.3 million tons, 1.0 million tons, and 1.2 million tons, respectively. These reductions are based on harvest results confirming yield losses due to hot and dry June conditions in winter wheat regions and expanding dryness in the spring wheat areas of Russia and Kazakhstan. Moldova production is also down 0.2 million tons.

Partly offsetting is a 0.5-million-ton production increase for Argentina and a 0.2-million-ton increase for Ukraine.

Projected 2019/20 global exports are down 0.5 million tons led by a 1.0-million-ton reduction for Kazakhstan and 0.5-million-ton reductions each for the EU and Russia, all on the smaller crops. Partly offsetting is a 0.7-million-ton increase for the United States and 0.5-million-ton increases for both Argentina and Ukraine.

Projected 2019/20 world consumption is 2.0 million tons lower on both reduced feed and residual use and food and industrial consumption. With supplies falling more than use, global ending stocks are revised 1.1 million tons lower to 285.4 million tons, but remain record large.

Full report.


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