Wheat Letter

By Stephanie Bryant-Erdmann, USW Market Analyst

This week, U.S. Wheat Associates (USW) holds its 2018 Fall Board of Directors meeting. At each board meeting, the USW Market Analyst presents an update on world and U.S. wheat supply and demand factors based on information from the U.S. Department of Agriculture, as of Oct. 11, 2018. Following are some highlights from the current report to the board.

• 2018/19 global wheat production to fall for first time in 5 years.
• Global supplies estimate to fall to 1,006 million metric tons (MMT); down 1 percent from the 2017/18 record.
• Wheat production in Australia to fall to 18.5 MMT, 26 percent below the 5-year average.
• U.S. wheat production estimated at 51.3 MMT, 8 percent above 2017/18.

• Consumption forecast at a record 746 MMT, 4 percent above the 5-year average.
• Chinese domestic consumption expected to reach 122 MMT, 5 percent above the 5-year average.
• U.S. domestic consumption to grow 6 percent year over year to 31.1 MMT.

• World wheat trade projected at 180 MMT, 4 percent above the 5-year average.
• Australian exports to drop to 13.0 MMT, 10 percent below 2017/18, and the lowest level since 2007/08.
• Exports from Russia to fall 15 percent year over year 35.0 MMT, still 28 percent above the 5-year average.
• U.S. 2018/19 exports to increase to 27.9 MMT, up 14 percent from 2017/18, if realized.

• World beginning stocks estimated at record 275 MMT, up 7 percent year over year.
• Beginning stocks in Argentina forecast at 1.00 MMT, down 42 percent the 5-year average.
• U.S. beginning stocks will fall to an estimated 29.9 MMT, 7 percent below 2017/18 levels.

• Global ending stocks projected at 260 MMT, 5 percent below the record 2017/18 level, if realized.
• Estimated Chinese ending stocks of 136 MMT account for 52 percent of global ending stocks.
• Exporter ending stocks forecast at 58.8 MMT, down 24 percent year over year.
• Ending stocks in importing countries to fall to 65.6 MMT, 15 percent below the 5-year average of 76.8 MMT.

• Total U.S. wheat export sales for 2018/19 predicted to reach 27.9 MMT.
• As of Oct. 11, 2018/19, U.S. wheat export sales were 18 percent behind last year’s pace.
• About 27 percent of that difference represents temporary loss of the Chinese market.
• Sales of soft red winter and durum are ahead of last year’s pace.