WASDE Wheat: Higher Exports, Lower Ending Stocks

The outlook for 2020/21 U.S. wheat this month is for slightly smaller supplies, unchanged domestic use, higher exports, and lower ending stocks. Supplies are reduced on lower imports, which are decreased 5 million bushels to 120 million on a slower-than-expected pace.

Exports are raised 10 million bushels to 985 million as higher white wheat exports are partially offset by lower Hard Red Winter (HRW) exports. Sales and shipments of white wheat have been robust this marketing year to several East Asian countries.

Conversely, HRW exports have slowed for the past several weeks. Projected 2020/21 ending stocks are reduced 15 million bushels to 862 million, down 16 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 1.2 million tons to 1,074.3 million on higher global production, which is now a new record at 773.7 million. Most of this month’s production increase is for Australia, which is raised 1.5 million tons to 30.0 million.

This increase is partially based on the latest ABARES production forecast. Russia’s production is raised 500,000 tons to 84.0 million with the harvest results now complete. Canada’s wheat production is raised 0.2 million tons to 35.2 million on the final Statistics Canada estimate for the 2020/21 crop year.

With this month’s production changes, Australia, Canada, and Russia all have their second largest wheat production on record.

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World 2020/21 consumption is increased 5.1 million tons to 757.8 million, mostly on higher feed and residual use for China, Australia, and the EU. China is raised 3.0 million tons to 24.0 million, which would be its highest wheat feed and residual use since 2012/13.

Increased wheat feed usage is expected as China’s domestic price premium of wheat over corn has narrowed significantly this year with greater supplies of old-crop wheat available through government auctions of grain stocks. Projected 2020/21 global trade is raised 2.9 million tons to 193.7 million on higher exports for Australia, Canada, Russia and the United States.

The largest import increases this month are for China and Pakistan, each raised 500,000 tons. China’s import pace continues to be significantly higher than last year and at 8.5 million tons, imports would be the largest since 1995/96.

Pakistan continues to actively import wheat to raise stocks in order to alleviate food price inflation concerns. Pakistan’s imports of 2.5 million tons would be its largest since 2008/09. Projected 2020/21 world ending stocks are lowered 3.9 million tons to 316.5 million but remain record high with China and India holding 51 and 10 percent of the total, respectively.

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