The outlook for global 2018/19 wheat production improved by 3.4 million metric tons in September due largely to a 3 million metric ton increase in forecast Russia wheat production. Excellent weather in the spring wheat belt helps to lift regional production prospects and more than offsets cuts for Australia and Canadian crops.
Australia production is lowered 2 million metric tons this month to 20 million, the lowest level since 2007/08. Net growth in global production and supplies outpaced expanded use, leading to a 2.3 million metric ton increase in global ending stocks.
Ending stocks for 2018/19 remain below last year’s record.
Domestic Outlook
Domestic Changes at a Glance:
- The 2018/19 U.S. all-wheat supply and demand estimates are unchanged from the August projections.
- On September 28, USDA, National Agricultural Statistics Service (NASS) will release the 2018 Small Grains Summary and the Grain Stocks report.
- The Small Grains Summary will contain any production revisions for aggregate winter, other spring, and durum wheat, as well as disaggregated wheat by class.
- The Grain Stocks report will provide indications of 2018/19 first quarter wheat disappearance and inform potential updates to quarterly stocks and feed and residual use projections.
- In July, Secretary Perdue announced the creation of a Market Facilitation Program (MFP). Updates in August and September have provided more detail on what the MFP entails. A summary of the program as it pertains to wheat is included in this report.
U.S. 2018/19 All-Wheat Harvest Essentially Complete
As of the week ending September 9, 2018, USDA, NASS reported 93 percent of the spring wheat crop was harvested. With the harvest essentially complete, attention now turns to understanding the quality of the 2018/19 crop and planning for winter wheat planting. Industry sources indicate that the average protein content of the 2018 hard red winter wheat crop is approximately 12.3 percent and compares to the 11.4 percent realized for the 2017 crop.
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Further evidence of improved quality year-to-year is greater average test weights; 61.1 pounds per bushel versus 60.8 pounds for 2017. Average protein levels are also up year-to-year for soft red winter wheat (up 0.6 percent), hard red spring (up 0.1 percent), and durum (up 0.1 percent).
Throughout the spring wheat growing season, conditions have been much more favorable in the key production States: Montana, North Dakota, and South Dakota. Across these three States and throughout the reporting period (weeks 22-33), nearly 50 percent more of the spring wheat crop was rated “good” to “excellent.” The extreme drought conditions that plagued the 2017 crop have largely abated and, with their departure, conditions emerged that supported a spring wheat crop that is substantially higher rated, supporting projections of a record-large spring wheat crop.
Planting of the 2019 Winter Wheat Crop Is Underway
On September 11, USDA, NASS released the first report on 2019 winter wheat plantings. As of September 9, 5 percent of intended 2019 winter wheat acreage had been sown, on par with the 2018 pace and the 5-year average. Planting is most advanced in Washington State, where 29 percent of intended winter wheat acres were planted, slightly above the 5-year average pace of 24 percent.
Planting in the Pacific Northwest has been aided by surface dryness that facilitated field work. However, a lack of moisture can be concerning for crop development. Topsoil moisture is reported as short to very short in Oregon (98 percent short to very short), Idaho (74 percent), and Washington (68 percent).
2018/19 Balance Sheet Unchanged, Price Range Narrowed
Ahead of the September 28 release of USDA, NASS’ Small Grains Summary, the current winter, other spring, and durum wheat production forecasts for 2018 are unchanged. With no changes made to aggregate imports or beginning stocks, total supplies for the 2018/9 marketing year are unchanged.
Some minor shifts in imports and exports across the classes are made. No changes are made to the all-wheat ending stocks projection. Also on September 28, NASS will release the latest Grain Stocks report, which will provide indications of implied disappearance during the first quarter of the new marketing year.
The season-average farm price (SAFP) for all wheat is unchanged this month and remains at $5.10 per bushel with the range narrowed 10 cents on the high end (to $5.50) and raised 10 cents on the low end (to $4.70).
