In the May WASDE, new-crop wheat production forecasts for the U.S. and EU were both slightly down from 2019/20.
However, USDA forecasted 2020/21 world wheat production at a record 768.5 MMT (28.2 billion bushels), supported by sizeable crops in Australia, Canada, and Russia, and a record crop in Argentina.
Each of the countries listed above, and the EU, are major exporters. With higher world supplies YOY, the wheat export market may be especially competitive in 2020/21 as wheat prices may see continued bearish pressure.
Record world production led to new-crop ending stocks of 310.1 MMT for 2020/21, also an all-time high. It is worth noting that though China accounts for nearly 52 percent of the new-crop world ending stocks, the country is a net importer of wheat.
If USDA’s 2019/20 and 2020/21 world ending stocks forecasts hold, stocks will have risen YOY in seven out of the previous eight seasons.
The industry estimated world wheat production to be 7.6 MMT lower that the USDA forecast, and ending stocks to be 16.6 MMT lower, so both USDA’s figures were notably bearish.