WASDE Wheat: Increased Production, Lower Ending Stocks

Wheat harvest. Photo: K-State Research and Extension - Creative Commons

The outlook for 2020/21 U.S. wheat this month is for increased production offset by lower imports, higher exports, and lower ending stocks. U.S. wheat production is raised 14 million bushels to 1,838 million as increased Hard Red Spring (HRS) and Durum production more than offsets lower winter wheat production as indicated by the NASS August 12 Crop Production report.

Imports are lowered 10 million bushels this month to 130 million on the larger HRS supplies. Estimated food use for 2019/20 is lowered fractionally to 962 million bushels, based on the latest NASS Flour Milling Products report.

Food use for the 2020/21 market year is lowered 4 million bushels to 960 million as food consumed away from home is expected to remain lower than last year due to the impact of COVID-19. Projected 2020/21 exports are raised 25 million bushels to 975 million on lower production for several key competitors, most notably the EU.

With offsetting supply changes and increased use, ending stocks are lowered 17 million bushels to 925 million. If realized, these will be the lowest wheat ending stocks in 6 years.

However, the season-average farm price is decreased $0.10 per bushel to $4.50 on lower U.S. corn prices and reduced wheat price expectations for the remainder of the market year.

Foreign 2020/21 wheat production is lowered 3.7 million tons led by a 4.0-million-ton reduction for the EU, and 1.0-million-ton reductions each for Kazakhstan and Turkey. These changes are partially offset by a 1.5-million-ton production increase for Russia and a 1.1-million-ton increase for Brazil.

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The production changes are based on updated harvest results and government estimates. Global beginning stocks are raised 3.8 million tons, reflecting several mostly offsetting changes as well as a 3.5 million ton increase for the EU, which is based on multi-year revisions to both use and stocks.

Foreign consumption is lowered 1.3 million tons, led by a 1.0-million-ton reduction for EU feed and residual use based on the smaller crop. Global exports are lowered fractionally with several offsetting changes including a 1.5-million-ton cut for the EU, and a 0.8-million-ton reduction for Kazakhstan, both on reduced production.

These are offset by a 1.5-million-ton export increase for Russia, based on increased supplies, and a 0.7-million-ton increase for the United States. With global use down more than supplies, world ending stocks are revised 2.0-million-tons higher to a record 316.8 million tons.

Full report.




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