The United States Department of Agriculture (USDA) has released the wheat supply and demand estimates for the 2018-2019 marketing year.
The projected midpoint price of wheat falls $5.00; it is 30 cents higher than the 2017-2018 marketing year’s price forecast of $4.70. Meanwhile, the estimated average price range of the current marketing year is between $4.50 and $5.50.
Furthermore, wheat production of the US is projected to be 1.82 billion bushels, compared to 1.74 billion bushels in 2017.
Production of hard red winter wheat is expected to be 674 million bushels, 76 million lower than the 750 billion bushels also in the previous year, and a five-year average of 830 million bushels.
US winter wheat production is estimated to be 80 million bushels less than in 2017. US spring and durum wheat, on the other hand, is projected to be 158 million bushels more compared in the previous year. About 70 percent of spring and durum wheat production is projected to be in the hard red spring wheat category.
Russia’s 2018 wheat production estimate is lower at 2.65 billion bushels compared to its record of 3.12 billion last year. The country’s wheat exports have averaged 990 million bushels per marketing year. The exports on this marketing year are projected to be at 1.34 billion bushels, down 1.45 billion bushels compared to the previous marketing year.
Global production is estimated at 27.5 billion bushels, compared to the 27.9 billion record in the previous marketing year. A 400 million decrease is marginally positive for prices.
On the other hand, wheat consumption is projected at a record of 27.7 billion bushels. World-ending stocks are projected to decline from the record 9.94 billion to 9.71 billion bushels. The stocks-to-use ratio is also projected to decline at 35.1 percent from 36.4 percent.
The commodity’s exports have increased 1.8 bushels over the last six years; 1.7 billion of this was an increase in hard red wheat. Major market factors to consider when predicting market year prices are world and US hard red production, test weight, and protein.
Ultimately, world wheat exports are projected to increase from the previous year’s 6.69 billion to 6.92 billion bushels on this marketing year.
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