20210714-USDA-Wheat_Outlook__July_2021_15页_1mb

Wheat Outlook Summary - July 2021

Core Content

This report provides an overview of the U.S. and global wheat supply and demand outlook for the 2021/22 marketing year, highlighting production changes, trade dynamics, and price forecasts.

Main Points

U.S. Domestic Outlook

• Production Cut: U.S. wheat production for 2021/22 is reduced by 152 million bushels from the June forecast, totaling 1,746 million bushels.
• Supply Reduction: The 2021/22 supply is projected at 2,735 million bushels, down 140 million from the previous month.
• Utilization Cut: Total utilization is expected to decrease by 35 million bushels due to lower domestic and export use.
• Ending Stocks: Ending stocks are forecast to drop to 665 million bushels, a 105 million bushel decrease from the previous month.
• Farm Price Increase: The season-average farm price (SAFP) is projected to rise to $6.60 per bushel, up 10 cents from the previous month.
• Drought Impact: 95% of durum production and 98% of other spring wheat are in drought-affected areas, leading to significant yield reductions.
• Durum Production: Down 46% from 2020, projected at 37.2 million bushels.
• Other Spring Wheat: Down 41% from last year, at 345 million bushels.
• White Wheat: Production down 22% due to dry conditions in the Pacific Northwest, with total production at 236.8 million bushels.
• White Wheat Stocks: Ending stocks are forecast to be the tightest since 2013/14.
• Soft White Wheat: Expected to have higher protein content due to drought conditions.

U.S. Wheat Classes

• Hard Red Winter (HRW):

  • Production is projected at 804.6 million bushels, up from 658.6 million.
  • Area planted and harvested both increased.
  • Yields are expected to be the highest since 2017/18.
  • Stocks-to-use ratio is forecast to be the lowest since 2013/14.

• Hard Red Spring (HRS):

  • Production is down 29% to 305.4 million bushels.
  • Beginning stocks are down to 235 million bushels.
  • Exports are projected to decrease by 23% to 220 million bushels.

• Soft Red Winter (SRW):

  • Production is expected to increase to 362 million bushels.
  • Exports and domestic use are projected to be stronger.
  • Ending stocks are forecast to be the highest since 2013/14.

• Durum:

  • Production is projected at 37.2 million bushels, down 46% from 2020.
  • Ending stocks are forecast to be the smallest since 2007/08.
  • Durum imports are expected to increase, mainly from Canada and Italy.

Global Outlook

• Global Production: Projected at 792.4 million metric tons (MT), still a record, but down 2 million MT from the previous forecast.
• U.S. Production: Reduced by 4.1 million MT to 47.52 million MT, mainly due to lower spring wheat and durum production.
• Foreign Production: Increased by 2.1 million MT to 744.88 million MT, led by Australia's 1.5 million MT increase.
• Russia: Total production at 85 million MT, down 1 million MT, with reductions in both spring and winter wheat.
• Kazakhstan: Production at 13 million MT, down 1 million MT due to below-average rainfall.
• EU and UK: Production increased by 700,000 MT each, with the UK's production up 53% year-over-year.
• Ukraine: Projected to set a new yield record at 4.18 MT/ha.
• Pakistan: Expected to reach a record production of 27 million MT, with increased imports to boost strategic reserves.
• Global Consumption: Slightly reduced to 790.9 million MT, with FSI consumption adjusted up by 1.7 million MT.
• Global Trade: Increased by 1.5 million MT to 205.5 million MT, with Australia and the EU seeing the largest export boosts.
• Import Revisions: Pakistan's imports increased by 1.5 million MT to 2.5 million MT, while the U.S. and UK saw reductions due to lower production.

Key Information

• Supply Tightening: Reduced U.S. supplies and production are expected to lower total utilization and tighten stocks-to-use ratios.
• Price Support: Tighter supply outlook supports higher wheat prices.
• Drought Impact: Widespread drought in the Northern and Western U.S. significantly impacts spring wheat and durum yields.
• Global Production Trends: Australia and Ukraine are key drivers of increased global production, while Russia, Kazakhstan, and Canada face production declines.
• Trade Adjustments: Pakistan, Nigeria, and Thailand are expected to increase wheat imports, while exports from the U.S., Canada, and the UK are projected to decline.
• Strategic Imports: Pakistan's strategic reserve imports are a major factor in global trade adjustments.
• Regional Variations: Some regions, like the UK and France, benefit from favorable weather conditions leading to higher production.
• Market Dynamics: With global supply tight, U.S. wheat is expected to be more competitive in international markets.