Lower U.S. wheat production forecast, as expected, led to tightening of USDA’s domestic wheat balance sheet this month. World Agricultural Outlook Board Chair Mark Jekanowski.
“Generally speaking, not too many changes in the supply and demand balance for wheat this month. Production estimates added up to a six-million-bushel reduction in U.S. production. On our balance sheet, we didn’t make any changes to our export or other use forecasts, so all that essentially did was tighten up ending stocks by six million bushels from where we were last month. So now we’re looking at U.S. ending stocks of 717 million bushels, and that’s down 203 million bushels from last year, just reflecting the fact that this wheat crop is a small crop. It’s historically small.”
Jekanowski added that it’s not just the U.S. reporting a smaller crop.
“A fairly sharp reduction in the European Union production estimate. We lowered it by 1.8 million tons this month, just reflecting that very hot and dry weather that spread across the entire EU region over the summer. A lot of that extreme heat hit right during the grain-filling stage for wheat, so that is showing up as reduced yield potential. So, with a 1.8-million-ton reduction in the forecast this month, that would bring the EU’s wheat production forecast down to 134.2 million tons, down just about 11 million tons from last year.”
Jekanowski noted USDA also reduced the wheat export forecasts for both Russia and Ukraine this month.