US Wheat Situation Tighter; Global Supplies Remain Heavy

The 2020-21 US wheat outlook may be tightening, but the global situation remains heavy.

Updated supply-demand estimates released by the USDA on Friday lowered estimated US all wheat ending stocks by 42 million bu from last month to 883 million – potentially the lowest in six years. On the other hand, projected world ending stocks were raised 2.1 million tonnes from September to a new high of 321.5 million, with Russia accounting for most of the increase.

Wheat futures were trading mixed, after the report’s release.

For the US, this month’s lower ending stocks estimate is due to a 32-million bu reduction in total supplies to 2.979 billion bu – mainly the result of lower beginning stocks and production as indicated by the Sept. 1 grain stocks and small grain summary reports released last month. Total supplies were further reduced by a small 5-million bu reduction in expected imports.

On the other hand, projected domestic use was raised 10 million bu from last month to 1.121 billion, all on higher feed and residual use.

Meanwhile, this month’s 2020-21 global wheat outlook is for larger supplies, increased consumption, greater exports, and higher stocks. Supplies are raised 2.2 million tonnes from September to 1.072 billion, mostly on Russia’s production increasing 5 million tonnes to 83 million, which is the second-largest crop on record following 2017-18. The increased Russia production is based on updated harvest results as reported by Russia’s Ministry of Agriculture, which imply record-high spring wheat yields, the USDA said.

Russia’s increased production more than offsets reductions in Ukraine, Canada, Argentina, and the US.

Source: DePutter Publishing Ltd.

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