On Tuesday, the USDA released the June WASDE report, which offered a few key updates to the global wheat crop. The USDA noted that global wheat stocks for 2018/19 increased, while U.S. ending stocks declined.
Here’s our breakdown of the numbers.
The USDA’s June WASDE report showed the market that American farmers will produce 1.83 billion bushels of wheat in 2018. This figure was an increase of 6 million bushels than what the USDA reported in May 2018.
Compared to the five-year average of 2.16 billion bushels, 2018/19 American wheat production is 15% lower.
Going into the report, the average guesstimate for US wheat was 1.82 billion bushels. Thus, the market could be interpreting today’s number as bearish.
From a demand perspective, we can just look at ending stocks to get an idea of where we sit.
For American wheat, 2018/19 carryout is expected to come in at 946 million bushels. This figure was decreased by 9 million bushels than the figure reported last month.
Looking more global, wheat production is expected to slide 2% year-over-year to 744.69 million tonnes.
From a global carryout perspective, 2018/19 is forecasted by the USDA to end with 266.16 million tonnes. This is down 2% year-over-year and above the pre-report average guesstimate of 263 million tonnes.
The agency also projected that U.S. wheat exports would come in at 950 million bushels. That figure would represent a 25 million bushel increase from the May report.
A few other key points from the report:
The USDA pegged a 10 million bushel drop in Hard Red Winter Wheat stocks. This is not surprising given the ongoing weather challenges that continue to plague the Texas panhandle and Oklahoma.
The agency projected a small increase in U.S. yields at 46.9 bushels per acre. That figure is 0.1 bushels higher than the May figure and 0.6 bushels higher than the 2017/18 figure. The USDA also hike the average farm price for wheat from a range of $4.50 – $5.50 to $4.60 to $5.60 per bushel.
The USDA cut Russian production expectations for 2018/19 from 72 MMT to 68.5 MMT. The agency reduced Russian ending stocks by 500,000 MT to 5.22 MMT. The agency pegged Russian exports at 35 MMT, a figure that came in 1.5 MMT lower than the previous report.
To get a view of all the major numbers in today’s June 2018 WASDE report, read our live update on the FarmLead Insights page.