On Thursday, October 11th, the USDA released the October WASDE report, which gave us further insight into global and American wheat carryout numbers for 2018/19..
Going into the report, the market was a bit bearish, expecting 2018/19 wheat carryout in both the U.S. and around the world to increase.
When the report came out at 12 PM Eastern, the most noticeable updates were increases in US production and carryout.
Let’s dig in:
For spring wheat, the USDA raised 2018/19 production by 4 million bushels from the September WASDE estimate of 583 million bushels. This new production number of 587 million bushels (or 16 million metric tonnes if converting bushels to tonnes) would also be up 52% year-over-year.
This is off a total harvested spring wheat acreage of 12.9 million acres, +27% year-over-year. This intuitively means that average American spring wheat yields came in at 45.5 bushels per acre, +14% year-over-year.
Back in the September’s estimate of spring wheat ending stocks, the USDA was forecasting 252 million bushels to carryover at the end of 2018/19. However, the USDA is now estimating that America will go into the 2019/20 with 261 million bushels of spring wheat carryout. For perspective, back in July, the USDA was estimating spring wheat carryout as high as 283 million bushels.
The USDA’s October WASDE report didn’t show any changes to the winter wheat numbers from the September WASDE, keeping production at 1.22 billion bushels and ending stocks at 651 million bushels. .
This means that, from a total production standpoint, this means the U.S. produced 1.88 billion bushels of wheat in 2018/19, which is about 9% below the 5-year average.
Looking more globally, 2018/19 production was lowered by 2.08 MMT from September to 730.9 MMT in this October WASDE report.
This is how 2018/19 production was adjusted in the October WASDE for major exporters:
- China: 128 MMT (September WASDE was 128 MMT, 2017/18 production was 129.8 MMT)
- Russia: 70 MMT (September WASDE was 71 MMT, 2017/18 production was 85 MMT)
- Ukraine: 25.5 MMT (September WASDE was 25.5 MMT, 2017/18 production was 27 MMT)
- Europe: 137.5 MMT (September WASDE was 137.5 MMT, 2017/18 production was 151.7 MMT)
- Canada: 31.5 MMT (September WASDE was 31.5 MMT, 2017/18 production was 30 MMT)
- Australia: 18.5 MMT (September WASDE was 20 MMT, 2017/18 production was 21.3 MMT)
- Argentina: 19.5 MMT (September WASDE was 19.5 MMT, 2017/18 production was 18 MMT)
Keep in mind that StatsCan, using a satellite-based estimate 3 weeks ago, said that Canada will produce 22.91 MMT of spring wheat in 2018/19. This was mainly because StatsCan upgraded spring wheat yields by 3.1 bushels per acre (bpa) to 46.6!
For total wheat production, StatsCan said that a little more than 31 MMT would come off Canadian fields, a jump of literally 2 MMT from the August report. Like spring wheat, wheat yields were raised by StatsCan by 3 full bushels to an average of 46.9 bpa.
Also worth noting is that the USDA is still not aligned with ABARES’ production forecast for Australia wheat of 20 MMT from a month ago.
Coming back to the global picture, global wheat carryout for 2018/19 was pegged at 260.2 MMT. This is down from September’s estimate of 261.3 MMT and above the pre-report estimate of nearly 259 MMT.
For the 2017/18 crop year (which just finished), global wheat carryout was suggested by the USDA at 274.8 MMT; September’s estimate was 274.4 MMT. The pre-report estimate for global wheat carryout was 274.5 MMT.
Going into this weekend’s GrainCents Spring Wheat Digest, we’ll be digging into these numbers a it more, in addition to:
- Quality of the US hard red spring wheat crop;
- How Brazilian & Argentine wheat crops are doing; and
- Impact of drought in Eastern Europe this year
See you on Sunday!