US and world wheat ending stocks were both revised lower in updated USDA supply-demand estimates on Tuesday, although supplies still remain comfortable overall.
US wheat ending stocks for 2020-21 were trimmed 26 million bu from last month to 836 million, down 19% from a year earlier, while world ending stocks were lowered 3.3 million tonnes to 313.2 million - still up from 300.09 million a year earlier and a new record high. Ahead of the report, the average trade guess had US ending stocks at 859 million bu and world stocks at 315.37 million tonnes.
Wheat futures were posting strong gains of between 20 and 30 cents this afternoon, as both corn and soybeans were trading sharply higher as well.
The change in the 2020-21 US ending stocks estimate was due to a 25-million bu increase in feed and residual use to 125 million, based on a USDA grain stocks report which was also released today. Seed use was revised higher as well, up 1 million from last month to reflect a larger US winter wheat planted area for harvest this summer.
Globally, the USDA reduced its estimates of 2020-21 China and Argentina wheat production but raised Russia.
China’s production was cut 1.8 million tonnes from last month to 134.3 million based on government statistics, while expected Argentina output was dropped 500,000 tonnes to 17.5 million to reflect the latest harvest results. If accurate, it would be Argentina’s smallest wheat crop in five years. On the other hand, Russian wheat production was bumped 1.3 million tonnes higher to a new record of 85.3 million tonnes.
The projected season-average farm price for wheat is raised 15 cents/bu this month to US$4.85 based on prices reported to date and expectations for futures and cash prices for the remainder of the marketing year.
Source: DePutter Publishing Ltd.
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