The outlook for 2020/21 U.S. wheat this month is for stable supplies, higher domestic use, unchanged exports, and lower ending stocks. Feed and residual use is raised 25 million bushels to 125 million on lower-than-expected second-quarter stocks reported in today’s NASS Grain Stocks report.
Seed use is up 1 million bushels to 63 million, reflecting 2020/21 wheat planted area released today in the NASS Winter Wheat and Canola Seedings report. Projected 2020/21 ending stocks are reduced 26 million bushels to 836 million, down 19 percent from last year.
The season-average farm price is raised $0.15 per bushel to $4.85 based on NASS prices reported to date and expectations for futures and cash prices for the remainder of the marketing year.
The 2020/21 global wheat outlook is for smaller supplies, increased consumption, higher exports, and reduced stocks. Supplies are lowered 1.6 million tons to 1,072.7 million on reduced production in China and Argentina more than offsetting an increase for Russia. China’s production is reduced 1.8 million tons to 134.3 million on the National Bureau of Statistics estimate.
Russia’s production is raised 1.3 million tons to a new record of 85.3 million, based on estimates from Russia’s statistical agency Rosstat, surpassing the 2017/18 crop. Argentina’s production is reduced 0.5 million tons to 17.5 million on updated harvest results to date and this would be Argentina’s smallest crop in five years.
World 2020/21 consumption is increased 1.8 million tons to 759.5 million, mostly on higher feed and residual use for China and the United States and greater food, seed, and industrial (FSI) use for Russia. Continued high domestic corn prices in China are expected to result in further wheat feed use as projected 2020/21 wheat feed consumption is raised 1.0 million tons to 25.0 million, up 32 percent from last year.
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Russia’s FSI consumption is raised 500,000 tons to 23.5 million with greater supplies.
Projected 2020/21 global trade is raised fractionally to 193.8 million tons on higher exports for Canada, the EU-27+UK, and India more than offsetting reductions for Russia and Argentina. Russia’s recently announced wheat export tax and grain export quota is expected to temper Russia’s exports in the latter stages of the marketing year when it is imposed in mid-February.
Russia’s exports are reduced 1.0 million tons to 39.0 million while EU-27+UK exports are raised 500,000 tons to 26.5 million as the EU-27+UK is expected to gain from Russia’s export restraints. Canada’s exports are raised 500,000 tons to 26.5 million on a strong early export pace and the expectation of continued large shipments to China as its imports are also raised this month to 9.0 million.
Projected 2020/21 world ending stocks are lowered 3.3 million tons to 313.2 million but remain record high with China and India holding 51 and 10 percent of the total, respectively.