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Wheat Outlook Summary

Core Content

The Wheat Outlook Report by the Economic Research Service (ERS) provides an analysis of global and U.S. wheat production, consumption, and export trends for the 2018/19 marketing year. It highlights the impact of weather conditions, trade dynamics, and economic indicators on wheat supply and demand.

Main Points

Global Wheat Production and Exports

• Global production for 2018/19 is expected to decrease by 6.6 million metric tons, primarily due to a 9% year-over-year decline in the European Union (EU).
• U.S. exports are projected to increase by 50 million bushels to 1,025 million, with the U.S. share of global wheat exports rising to 16%, up from 12.6% in the previous marketing year.
• Global ending stocks are forecasted to drop by nearly 2 million tons to 259.0 million, the lowest since 2014/15, due to reduced supplies and increased demand.

U.S. Domestic Outlook

• U.S. all-wheat production for 2018 is slightly down by 4 million bushels from the previous month, but remains 8% higher than in 2017.
• U.S. all-wheat food use for 2017/18 is raised by 1.4 million bushels to 964.4 million, and for 2018/19, it is increased by 5 million bushels to a record high of 970 million bushels.
• Ending stocks for 2018/19 are reduced by 50 million bushels to 935.1 million, a 15% decrease from the previous year.
• Season-average farm price for all wheat is raised by 10 cents per bushel to $5.10, driven by a tighter stocks-to-use ratio and strong export demand, despite a 20 cent decline in corn prices.

Wheat Production by Class

• Hard red winter (HRW) production is forecasted at 661.23 million bushels, with protein levels up to 12.5%, improving from the previous two years.
• Soft red winter (SRW) production is at 291.81 million bushels, with a 4% decline from the July forecast.
• Winter white production is forecasted to increase slightly.
• Hard red spring (HRS) production is at 583 million bushels, with yields trimmed slightly due to dry conditions in the Northern Plains.
• Durum production is at 73.4 million bushels, with a 0.8 bushel per acre decrease from the July forecast, but 14.2 bushels per acre above last year's drought-affected levels.

Import Code Review and Redistribution

• The import code 1001990096, "Wheat, except durum, not elsewhere specified," was originally allocated to SRW.
• Due to changes in trade and production patterns, the distribution has been updated to 25% SRW and 75% HRS.
• Historical supply and utilization tables have been revised to reflect this change and are now available on the ERS Wheat Data landing page.

Key Information

• Global production fell sharply, with the EU as the main contributor to the decline.
• Russia and Pakistan saw increases in production, partially offsetting the EU decline.
• Australia experienced improved conditions in the western regions, supporting the current forecast of 22 million tons.
• U.S. export prospects are bolstered by the EU's reduced exportable supplies and the quality of U.S. winter wheat.
• Domestic demand for wheat is expected to rise, with food use projected to reach a record high.
• Stocks-to-use ratio is tightening, contributing to the price increase for U.S. wheat.
• Import code allocation has been updated to better reflect current trade dynamics, impacting the classification of wheat imports.

Summary of Changes

Additional Notes

• The U.S. all-wheat yield is slightly down from the July forecast, but still 1.1 bushels per acre above the 2017 level.
• U.S. wheat feed and residual is projected to account for 5.5% of total use in the 2018/19 marketing year.
• The 2018/19 wheat outlook is supported by favorable economic indicators, population growth, and improved wheat quality.
• Historical data for wheat by class and by quarter is now updated and expanded on the ERS Wheat Data landing page.