WASDE Wheat: Higher Exports, Lower Ending Stocks

Wheat heads. Photo: Oklahoma State University

The outlook for 2019/20 U.S. wheat is for decreased supplies, higher exports, and lower ending stocks. Wheat imports are lowered 15 million bushels to 105 million on a slower than expected pace to date; Hard Red Spring (HRS) is down 5 million bushels and Durum is lowered 10 million. If realized, these would be the lowest imports in nine years.

U.S. wheat exports are raised 25 million bushels to 975 million on a strong pace to date, more competitive prices, and reduced supplies from several major competitors. Hard Red Winter and Durum exports are each raised 10 million bushels, and HRS is raised 5 million.

With reduced supplies and higher use, 2019/20 ending stocks are cut 40 million bushels to 974 million, the lowest in 5 years. Despite the tightening stocks, the season-average farm price is lowered $0.05 per bushel to $4.55 based on NASS prices to date and expectations of cash and futures prices for the remainder of the market year.

The global outlook for wheat this month is for several mostly offsetting production changes, slightly lower global use and trade, and increased ending stocks. The Argentina and Australia wheat crops are cut 1.0 million tons and 1.1 million tons, respectively, both on continued drought conditions.

The Argentina crop is now pegged at 19.0 million tons and Australia’s crop is estimated to be 16.1 million tons. This is Australia’s smallest crop since 2007/08. Canada’s crop is cut 0.7 million tons to 32.4 million on updated government data.

Partly offsetting is a 1.6-million-ton production increase for China to 133.6 million on updated National Bureau of Statistics data. The EU and Russia crops are each raised 0.5 million tons reflecting updated harvest data.

Projected 2019/20 global exports are reduced 0.9 million tons as reductions for Argentina, Australia, and Canada are partly offset by increases for Russia and the U.S. The U.S. has become more price competitive in some international markets, and increased sales are expected to continue in the second half of the market year from reduced competition.

With global use down 1.4 million tons, world ending stocks are raised 1.2 million tons to a record 289.5 million tons. China’s 2019/20 ending stocks are raised 1.8 million tons to 147.5 million and account for 51 percent of the global total.

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