WASDE Wheat: Reduced Domestic Use, Lower Stocks

The outlook for 2019/20 U.S. wheat this month is for smaller supplies, reduced domestic use, and lower stocks. Wheat supplies are decreased 42 million bushels, based on updated production estimates for the States resurveyed following the NASS Small Grains Summary, issued September 30. Adjustments to production in these States, where significant acreage remained unharvested in early September, lowers production estimates for Hard Red Spring wheat, White wheat, and Durum with most reductions occurring in North Dakota and Montana.

Estimated seed use is reduced 7 million bushels to 61 million, reflecting a projected 2020/21 all wheat planted acreage of 45.0 million. Food use is lowered 5 million bushels to 955 million, primarily based on the NASS Flour Milling Products report, issued November 1.

Projected 2019/20 wheat stocks are reduced 30 million bushels to 1,014 million. The season-average farm price is reduced $0.10 per bushel to $4.60, based on NASS prices reported to date and expectations for cash and futures prices the remainder of the 2019/20 marketing year.

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The global outlook for wheat this month is for higher supplies, increased exports, fractionally greater consumption, and higher ending stocks. Supplies are raised with increased production forecasts for the EU, Russia, and Ukraine more than offsetting reductions for Argentina and Australia.

EU and Russia production forecasts are raised to 153.0 and 74.0 million tons, respectively, on updated harvest results. Australia’s production is lowered to 17.2 million tons on further damage from the continent’s severe drought and is now forecast lower than last year’s drought-affected crop. Argentina’s production is reduced to 20.0 million tons on dry conditions but remains record large.

World exports are raised by 1.0 million tons to 180.7 million on increases for the EU, Russia, and Ukraine more than offsetting reductions for Argentina and Australia. Global consumption is nearly unchanged at 755.2 million tons, which is 3 percent greater than last year.

With global supplies rising more than consumption, 2019/20 ending stocks are raised to a record 288.3 million tons with China comprising 51 percent of the total.

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