WADE Wheat: Increased Domestic Use, Reduced Ending Stocks

The outlook for 2020/21 U.S. wheat this month is for stable supplies, higher domestic use, unchanged exports, and reduced ending stocks. Domestic use is raised, primarily on higher food use, which is increased 5 million bushels to 965 million, up from 962 million for 2019/20. This increase is based mainly on the NASS Flour Milling Products report, which indicated higher food use for the early part of the marketing year than previously estimated. All wheat exports and imports are unchanged this month but there were offsetting by-class changes for both exports and imports.

Projected 2020/21 ending stocks are reduced 6 million bushels to 877 million, down 15 percent from last year. The season-average farm price is unchanged at $4.70 per bushel.

The 2020/21 global wheat outlook is for larger supplies, increased consumption, higher exports, and reduced stocks. Supplies are raised 0.7 million tons to 1,073.1 million as higher beginning stocks offset lower global production, which remains at a record. Most of this month’s production decrease is for Argentina, where production is lowered 1.0 million tons to 18.0 million.

The lingering impacts of drought and local freeze damage have caused Argentina’s forecast yield to be the lowest in eight years. World consumption is increased 1.7 million tons to 752.7 million, mainly on higher feed and residual use for China and the EU. Projected 2020/21 global trade is raised 0.9 million tons to 190.8 million on higher exports for Russia and the EU more than offsetting lower Argentina exports.

Increases in imports are led by China, Pakistan, and Turkey. China’s import pace continues to be robust and at 8.0 million tons, imports would be the largest since 1995/96. Projected 2020/21 world ending stocks are lowered 1.0 million tons to 320.5 million but remain record high.

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