The 2019/20 U.S. wheat supply and demand outlook is unchanged this month but there were offsetting by-class changes for wheat exports. The projected season-average farm price is $4.80 per bushel, down $0.20 on NASS monthly prices reported to date and expectations for cash and futures prices for the remainder of the marketing year (MY).
Global wheat prices are expected to be restrained for the rest of the MY on greater 2019/20 exportable supplies for several major U.S. competitors compared to last year.
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The global outlook for wheat this month is for lower supplies, reduced consumption and exports, and higher ending stocks. Supplies are reduced primarily on lower production forecasts for Australia and Kazakhstan on continued dry conditions.
Australia’s production is lowered 2 million tons to 19.0 million, mainly on the second consecutive year of drought in New South Wales and Queensland. Kazakhstan’s wheat production is lowered 1.5 million tons to 11.5 million on further deteriorating conditions, and this would be its lowest output since 2012/13.
This reduction in global production is tempered by higher carry-in stocks, which results in global supplies less than 1 million tons lower this month.
World exports are decreased by 1.8 million tons to 180.8 million on reductions for Australia and Kazakhstan. Global consumption is lowered 1.9 million tons, led by declines for Indonesia, Russia, Uzbekistan, and Ukraine.
Despite a reduction this month in global supplies, 2019/20 ending stocks are projected record large at 286.5 million tons with China comprising 51 percent of the total.