While the outlook for 2020/21 European Union and Ukraine wheat crops is diminished this month, prospects for the U.S. crop are raised on improving yields for most winter varieties. The latest USDA, National Agricultural Statistics Service (NASS) yield for winter wheat is up 0.4 bushels per acre from the May forecast on an improving outlook for Kansas, Colorado, and Nebraska.
The now 1 percent larger U.S. all wheat crop combines with a 5-million-bushel increase in carryin from the previous marketing year to support a 16 million bushel increase in total U.S. wheat supplies, which—while larger month to month—is still smaller than a year prior. Total wheat supplies and exports tend to move together.
Expectations for still-abundant exportable U.S. supplies and robust international demand support the export forecast of 950 million bushels, down slightly from the 2019/20 export estimate.
Domestic Changes at a Glance:
- U.S. 2020/21 all wheat supplies are raised 16 million bushels this month on higherforecast winter wheat production and a 5-million-bushel increase in carryin from the2019/20 marketing year.
- At 1.877 billion bushels, all wheat production is 11 million bushels above the Mayforecast but remains below the 2019/20 estimate of 1.920 billion bushels.
- Please see this month’s Amber Wave Data Feature: U.S. Farmers Planting LessWheat, But Sowings of Winter Varieties Stay Stable for more details on wheat byclass plantings and use over time.
- Winter wheat production for the new crop year is raised from the May forecast on a 0.4bushel per acre yield increase.
- The USDA, National Agricultural Statistics Service (NASS) revised assessmentof harvested area prospects by class, including spring and durum, will bereleased in the July Crop Production report.
- Abundant global and domestic supplies, as well as low corn prices, constrain wheatprice improvement. The 2020/21 wheat season average farm price remains at$4.60/bushel.
- For the 2019/20 balance sheet, exports are trimmed 5 million bushels this month to 965million on slightly lower hard red spring and soft red winter shipments which is not fullyoffset by a recent uptick in hard red winter wheat sales, in part to China.
U.S. Winter Wheat Forecast Raised 1 Percent on Improved Yield Outlook Despite Lingering Dryness in the High Plains
The June 11 Crop Production report provided the second, survey-based winter wheat production forecast for the 2020/21 marketing year. U.S. winter wheat is production is forecast at 1.27 billion bushels, up 1 percent from the early May forecast but down 3.8 million bushels and about 3 percent from the 2019/20 figure.
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Expanding drought across the southern High Plains (western Kansas, southeastern Colorado, western Oklahoma, and northwestern Texas) is limiting the growth potential for 2020/21 yields. Yields in each of these major hard red winter wheat-producing States is down year-to-year and contribute to the slight decline in all winter wheat yields for 2020/21.
At 52.1 bushels per acre, the June 1 yield forecast is up slightly from the May 1 forecast, but down from the 53.6 bushels per acre estimated for the 2019/20 marketing year. If realized, the 2020 winter wheat yield will be the third highest on record.
2019/20 HRW SRW HWW SWW
Planted area (million acres) 22.458 5.201 0.434 3.066
Harvested area (million acres) 17.292 3.733 0.386 2.916
Production (million bushels) 833.181 239.166 19.954 211.702
Planted area (million acres) 21.700 5.690 0.451 2.969
Harvested area (million acres) 16.636 4.414 0.436 2.866
Production (million bushels) 742.939 297.343 16.584 208.834
Note: HRW=hard red winter wheat; SRW=soft red winter wheat. Hard white winter wheat (HWW) and soft white winter (SWW) area planted is based on the aggregate winter white wheat planted area reported by NASS (3.42 million acres) and historical proportions between the two classes.
Winter wheat conditions have generally fallen across the nation as evidenced by a trend of general decline in the NASS crop condition index used by USDA’s Office of the Chief Economist Meteorological Team. This index assigns the highest value (4) to “excellent” conditions rating and the lowest (0) to “very poor” ratings. At the outset of the 2020 crop conditions rating season, conditions for the nascent 2020 crop were on par with those for 2019 and 2016.
However, as the season has progressed, the conditions index—which started out at near 260—has steadily fallen until reaching approximately 235 for the week ending June 8, 2020. While this is a sign that the winter crop is increasingly stressed, the conditions index remains well-above comparable figures for 2018 and 2015 when the winter wheat crop was beset by widespread and persistent dry conditions.
Minimal Balance Sheet Changes for Back Year and 2020/21
The modest increase (less than 1 percent) in the projected 2020/21 all wheat production forecast, combines with increased carryin of 5 million bushels to lift supplies by 16 million in the new marketing year. The slight increase in supplies does not support an increase in exports, where the U.S. continues to be a residual global supplier; nor to feed and residual use as an abundant corn harvest and anemic prices will continue to incentivize use of coarse grains instead of wheat in feed rations.
Ending stocks are increased by the full amount of the supply augmentation and are raised to 925 million this month. On minimal balance sheet changes, the season average farm price is unchanged and remains at $4.60 for both the 2019/20 and 2020/21 marketing years. Next month’s World Agriculture Supply and Demand (WASDE) report will feature the first 2020/21 balance sheets by class and will reflect new production data to be released in the June Acreage report.