Wheat, quarterly stocks fell from 2.159 billion bushels on September 1 down to 1.671 billion bushels on December 1.
Analysts didn’t predict a big-enough drop, with the average trade guess at 1.695 billion bushels.
Projected 2020/21 ending wheat stocks fell another 26 million bushels to 836 million bushels, meantime. That’s 19% lower than the same point a year ago.
“Global and domestic livestock feed demand for wheat continues to build amid rising corn prices,” Holland says. “And after today, that trend is only likely to increase.
Despite a seasonal slowdown in U.S. wheat exports, a weak dollar and tight Russian exportable supplies convinced USDA to increase their demand targets on both exports and livestock feed for wheat.”
Winter wheat plantings moved higher than expected, jumping to 31.991 million acres.
Analysts expected a big jump but still only offered an average trade guess of 31.528 million acres.
Hard red winter plantings account for more than half of that total, with an expected 22.3 million acres.
Soft red winter wheat (6.23 million acres) and white winter wheat (3.48 million acres) picked up the remainder.
“Even with more 2020/21 winter wheat acres in the U.S., doubts are now floating about whether the increased acreage will be enough to satisfy demand,” Holland says.
Season-average farm prices improved another 15 cents per bushel to reach $4.85, “based on US Ag prices reported to date and expectations for futures and cash prices for the remainder of the year”.
The agency’s 2020/21 global wheat outlook calls for smaller supplies, improved consumption, higher exports and lower stocks.
Russian production is expected to move another 66 million bushels higher to reach a record 3.134 billion bushels. However, that boost is more than offset by falling production estimates for China, and in Argentina, where production is now predicted to fall to a five-year low.
