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WMR-U.S. Wheat Situation Similar to a Year Ago

Posted: Jun 28 2019

The 2019/2020 marketing year for U.S. wheat began on June 1, and the initial supply and demand projections from USDA paint a very similar picture to last year. Total supplies are anticipated to be near the 3.15 billion bushel level, up marginally from 2018, primarily due to higher production estimates. Production is pegged at 1.9 billion bushels, as current yield estimates of 48.7 bushel per acre are up from 47.6 last year, offsetting lower harvested acres. 
Overall demand is projected up slightly at 2.07 billion bushels, compared to 2.02 billion a year ago, as higher feed use offsets the lower initial export forecast. Feed use is projected higher because of the sharper increase in corn values compared to wheat and expectations of a lower quality hard red and soft red winter wheat crop in areas.  Exports are currently expected to fall to 900 million bushels, as record world production, and specifically larger crops in Canada, Russia, the Ukraine and the EU, challenge U.S. exports.

End of year stocks by June 2020 will likely hold near the 1.1 billion bushel level, nearly equal to June 2019. Given the nearly stable supply and demand outlook, average producer prices over all classes and qualities are projected at $5.10 per bushel, down from $5.20 this past year, but higher than $4.72 in 2017. Class specific supply and demand outlooks will be issued in the July reports.  

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