Wheat Outlook Jennifer K. Bond Olga Liefert 2019/20 Wheat Production, Feed and Residual Lifted, Exports Continue to Face Headwinds This month’s USDA, National Agricultural Statistics Service Crop Production report provided revised winter wheat and desert durum production for 2019/20. On net, winter wheat is raised 6 million bushels on improved yields. Production gains help to offset the effects of lower carryin stemming from increased back-year exports and leading to reduced total supplies month-to-month. New crop all-wheat feed and residual is increased by 50 million bushels on a sharp reduction in corn production and feeding (fig. 1). Prospects for 2019/20 exports are not improved from the previous month and remain at 900 million bushels. In 2019/20, recovery in European Union (EU) and Australia production and exportable supplies creates formidable competition for U.S. wheat in global markets. On expectations for larger crops, Russia and Ukraine exports are both raised a million tons this month and further inhibit growth in U.S. exports in 2019/20. 05001,0001,5002,0002,5003,0003,5004,000Ending stocksFeed and residualExportsFoodSeedSource: USDA, World Agricultural Outlook Board, WASDE. Figure 1: Both new and old crop U.S. wheat utilization are raised as ending stocks tightenMil. buEconomic Research Service | Situation and Outlook Report Next release is July 15, 2019 WHS-19f | June 13, 2019In this report: - Domestic Outlook- International OutlookDomestic Outlook Domestic Changes at a Glance: •U.S. Census Bureau trade data through April indicate a brisk pace of old crop shipmentsin the fourth quarter and support a 25-million-bushel increase in the 2018/19 exports.oEstimated total exports for the fourth quarter or the 2018/19 marketing yearexceeded expectations as the U.S. was able to capitalize on reduced exportablesupplies from the Black Sea region and more competitive export prices.•Larger back year exports serve to lower 2018/19 ending stocks and carryin for the2019/20 marketing year. Reduced carryin for 2019/20 is offset slightly growth inprojected wheat production.•Winter wheat production for 2019/20 is raised 6 million bushels this month to 1,274.5million on increased yields.oUSDA, National Agricultural Statistics Service (NASS) lifted hard red winter(HRW) wheat production by more than 14 million bushels from the previousforecast, more than offseting lower projected production for soft red winter(SRW), down 6.3 million, and white winter wheat (down 1.8 million).•Other spring wheat production is unchanged from the May forecast and will be re-evaluated following the end of June release of the Acreage report.•Forecast durum production for 2019/20 is cut slightly, down 194,000 bushels from theprevious projection on reduced desert durum production reported by NASS for Arizona.•Carryin is reduced by more than production is increased, resulting in a net 19.2 millionbushel reduction in supplies, relative to the May projection.•Total use for the new marketing year is raised 50 million bushels this month on asignificant expansion of projected feed and residual use.oWheat feed and residual use for 2019/20 is raised on sharp declines for bothcorn production and corn feed and residual, which in turn supports a 50-centincrease in the forecast season average corn price.•The tighter wheat balance sheet for 2019/20 and a significant increase in the corn pricecombine to lift the all-wheat season average farm price by 40 cents this month to $5.10per bushel.2Wheat Outlook, WHS-19f, June 13, 2019USDA, Economic Research ServiceTable 1 - U.S. wheat supply and utilization at a glance, 2018/19 and 2019/20 Balance sheet item 2018/19 June 2019/20 May 2019/20 June Change from previous month Comments Supply, total Million bushels May-June Marketing Year (MY) Beginning stocks 1,098.9 1,126.8 1,101.8 -25.0Carryin from 2018/19 is lower on increased old crop exports. Production 1,884.5 1,896.9 1,902.7 5.8 New crop production is raised 6 million bushels on higher Hard Red Winter wheat production that is not offset by cuts to Soft Red Winter and Winter White wheat production Imports 140.0 140.0 140.0 0.0 Supply, total 3,123.3 3,163.7 3,144.5 -19.2Reduced carryin more than offsets production gains, resulting in lower total supply in 2019/20. Demand Million bushels Food 960.0 965.0 965.0 0.0 Seed 61.5 68.0 68.0 0.0 Feed and residual 50.0 90.0 140.0 50.0 Feed and residual use for 2019/20 is raised 50 million bushels on a sizable cut to corn production and associated reduction in corn feeding. Domestic, total 1,071.5 1,123.0 1,173.0 50.0 Domestic use is raised 50 million bushels on expanded feed and residual use. Exports 950.0 900.0 900.0 0.0 Use, total 2,021.5 2,023.0 2,073.0 50.0 Total use is lifted 50 million bushels on expanded domestic utilization. Ending stocks 1,101.8 1,140.7 1,071.5 -69.2Reduced supplies and increased domestic use combine to tighten the balance sheet. A tighter all-wheat balance sheet supports a month-to-month incre...
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