The US Department of Agriculture (USDA) has lowered its estimate for global wheat production this month as smaller crops in Australia, Canada, the European Union, Russia, and Ukraine more than offset a larger United States crop.
Russia’s 2019/20 wheat production forecast was reduced this month by 3.8 million tons (Mt) to 74.2Mt due to drought, although it is still up from last year and would be the second-largest on record.
Wheat production in the European Union is estimated at 151.3Mt, down 2.5Mt (2pc) from last month, but up 14.1Mt (10pc) from last year’s poor harvest. In Ukraine, wheat production for 2019/20 is forecast at 29.0Mt, down 3pc from last month and up 16pc from last year.
The USDA raised its forecast of US 2019/20 wheat production to 1.921 billion bushels, up from 1.903 billion in June and above an average of trade estimates.
Reflecting the production cuts, USDA lowered its forecast of 2019-20 global wheat ending stocks to 286.46 million tonnes, down from 294.34 million in June and near the low end of a range of analyst expectations.
USDA also trimmed its forecast of U.S. 2019-20 wheat ending stocks to one billion bushels, lower than most analysts expected, although its estimate of U.S. all-wheat production was 1.921 billion bushels, above an average of trade expectations.
Global trade is lowered, mainly on reduced imports for Indonesia and Vietnam.
Wheat exports are projected lower for Australia, Russia, and Ukraine, creating further opportunities for the EU and the US.