U.S. Wheat Exports Plunge; Foreign Production Expands

According to today’s Wheat Outlook Report from USDA’s Economic Research Service (ERS), U.S. wheat exports are down 50 million bushels, making a new record low of 850 million bushels, the lowest since 1971. This is due to the slow pace of sales and relatively high prices for domestic wheat, along with increased production from competing nations. 

Ending stocks for 2015/16 are lowered 14 million bushels, as an 84 million-bushel production decline is more than offset by a decline in total use. Feed and residual use is lowered 20 million bushels after the September 30 Grain Stocks report indicated lower-than-expected June-August disappearance. 

Higher projected foreign 2015/16 wheat production for major exporters and larger beginning stocks boost world wheat supplies. With projected use unchanged, the already record-level ending stocks are increased further. Global wheat trade is projected higher, and exports are expected to rise for Ukraine, Canada, Australia, European Union (EU), Russia, and Kazakhstan. The U.S. remains priced out of most global wheat trade, with a further decline in its wheat export prospects. 

The USDA-National Agricultural Statistics Services (NASS) Small Grains Summary 2015 released on September 30 estimates 2015/16 U.S. wheat production at 2,052 million bushels, down 84 million bushels from the previous forecast and up 1% relative to the revised 2014 total of 2,026 million. At 861 million bushels, ending stocks of wheat for 2015/16 are down 14 million from the September projection and up 108 million bushels relative to the previous marketing year. 

For 2015, U.S. winter wheat production is estimated at 1,370 million, a reduction of 68 million bushels from the September forecast, and down 7 million bushels from 2014. Hard red winter (HRW) production is forecast at 827 million bushels, down 29 million bushels from September but up 88 million bushels from a year ago due largely to an anticipated 2.0-bushel-per-acre yield increase. Soft red winter (SRW) production is forecast at 359 million bushels, down 30 million bushels from the previous projection and down 95 million bushels from last year due to a combination of lower harvested area and lower yields. White winter wheat production for 2015 is forecast to total 184 million bushels, down 9 million from September, but up 0.2 million bushels from a year ago. 

Hard red spring (HRS) production is forecast at 564 million bushels, down 12 million from the previous forecast and up nearly 9 million bushels from 2014. The production gain is attributable to expanded harvested area, despite a slight decline in yields. White spring production is estimated to total 34.9.5 million bushels, down 10 million from the previous forecast and down 4.5 million bushels from 2014. 

Durum wheat production is forecast to total 82 million bushels, up nearly 6 million bushels from the previous forecast and up 28 million bushels from a year ago. Desert durum production in California and Arizona is forecast at 20.3 million bushels for 2015, up 0.8 million from the previous forecast, and nearly double the 2014 crop.