world wheat supply and demand situationhighlights of usda’s 2018/19 supply and demand estimates...
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World Wheat Supply and
Demand SituationJuly 2018
Major data source: USDA World Agricultural Supply andDemand Estimates released July 12, 2018. Projections will change over thecourse of the year depending on weather and other developments.
Highlights of USDA’s 2018/19 Supply and Demand Estimates
1. 2018/19 global wheat production to fall for first time in 5 years• Global supplies estimate to grow to 1010 MMT; down slightly from the 2017/18 record• Wheat production in Russia to fall to 67.0 MMT, down 21% year over year, if realized • U.S. wheat production estimated at 51.2MMT, 5% above 2017/18, if realized
2. Consumption forecast at a record 751 MMT, 4% above the 5-year average• Russian domestic consumption to decline to 39.5 MMT, 12% below 2017/18, if realized• U.S. domestic consumption to grow 8% year over year to 31.2 MMT
3. World wheat trade projected at a record 185 MMT, 7% above the 5-year average
• Russian exports to drop to 34.0 MMT, 17% below 2017/18 , still 25% above the 5-year average• Exports from the EU to climb 18% year over year to 27.5 MMT• U.S. 2018/19 exports to increase to 26.5 MMT, up 8% from 2017/18, if realized
4. World beginning stocks estimated at record 272 MMT, up 6% year over year• Beginning stocks in Russia forecast at 10.2 MMT, down 6% from 2017/18, still 56% above the 5-year
average• U.S. beginning stocks will fall to an estimated 29.9 MMT, 7% below 2017/18 levels
5. Global ending stocks projected at 261 MMT, 5% below the record 2017/18 level, if realized• Estimated Chinese ending stocks of 136 MMT account for 52% of global ending stocks• Exporter ending stocks forecast at 74.9 MMT, down 3% year over year• Ending stocks in importing countries to fall to 49.8 MMT, 35% below the 5-year average of 76.6 MMT
6. U.S. farm gate average price forecast 6% higher in 2018/19• Projected average range: $4.50 to $5.50/bushel ($165-$202/MT)*
*Average U.S. farm gate price, marketing year weighted average
Highlights of USDA’s 2018/19 Supply and Demand Estimates
World Production and Use
758
736
742 749
500
550
600
650
700
750
800
MM
T
Production Use
Supplies in Top Exporting Countries*
*Includes U.S., Canada, Australia, Argentina, EU-27, Russia, Ukraine and Kazakhstan
64 72 70
405 395 377
468 468 448
0
50
100
150
200
250
300
350
400
450
500
MM
T
Beginning Stocks Production
World Wheat Supply and Demand
16/17 17/18 18/19MMT
SUPPLY: Beginning Stocks 244 257 274Production 752 758 736Supply Total 996 1015 1010
TRADE: Exports/Imports 183 182 185
DEMAND Food & Seed 592 597 607Feed & Residual 147 145 142Use Total 739 742 749
ENDING STOCKS: 257 274 261
Historical Five Major Exporters include U.S., Canada, Australia, Argentina and EU-27. Black Sea includes Russia, Ukraine and Kazakhstan.
World Beginning Stocks
47 56 56
27 21 19
69 69 72
39
56
111 127
0
50
100
150
200
250
300
04/05 06/07 08/09 10/11 12/13 14/15 16/17 18/19
MM
T
Historical Five Major Exporters Black Sea Others China
Global Stocks*-to-Use Ratio
*Ending stocks
26
34 3537
35
0
5
10
15
20
25
30
35
40
04/05 06/07 08/09 10/11 12/13 14/15 16/17 18/19
Perc
ent
Global Stocks*-to-Use Ratio w/o China
*Ending stocks
27.2
24.8 24.3 24.523.4 23.4
19.8
0.0
5.0
10.0
15.0
20.0
25.0
30.0
04/05 06/07 08/09 10/11 12/13 14/15 16/17 18/19
Perc
ent
World Ending Stocks
Historical Five Major Exporters include U.S., Canada, Australia, Argentina and EU-27.Black Sea includes Russia, Ukraine and Kazakhstan.
52 56 56
17 21 19
78 7050
111 127136
257273
261
0
50
100
150
200
250
300
08/09 10/11 12/13 14/15 16/17 18/19
MM
T
Historical 5 Majors Black Sea Others China
World Ending Stocks by Position(million metric tons)
Exporters, 74.9
Importers, 49.8
China, 136
Global Ending Stocks and Price
43 56 45
1619
12
76
136
199204
214235
0
50
100
150
200
250
300
350
400
0
50
100
150
200
250
300
90/91 94/95 98/99 02/03 06/07 10/11 14/15 18/19
$US/
MT
MM
T
Historical 5 Majors Black Sea Rest of World HRW price
• Major Exporters• Import Demand• U.S. Situation by Class• Outlook
Canada Situation
5.2 6.9 5.6
32.130.0 32.5
20.2
22.8 24.5
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19
MM
T
Beginning stocks Production Imports Exports Domestic use
Canada Ending Stocks
5.1
10.4
5.2
6.9
5.65.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
08/09 10/11 12/13 14/15 16/17 18/19
MM
T
Australia Situation
4.7 4.6 4.7 3.9 5.7 4.9
23.722.3
31.8
21.3 22.0
16.6 16.1
22.6
15.0 16.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19
MM
T
Beginning stocks Production Imports Exports Domestic use
Australia Ending Stocks
3.1
8.2
7.1
4.6 4.7
3.9
5.7
4.9
3.0
0.0
2.0
4.0
6.0
8.0
10.0
08/09 10/11 12/13 14/15 16/17 18/19
MM
T
Argentina Situation
0.3
4.8
0.8 0.3 0.7
10.5
18.418.0
19.5
2.3
9.6
13.812.0
14.2
0.0
5.0
10.0
15.0
20.0
08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19
MM
T
Beginning stocks Production Imports Exports Domestic use
Argentina Ending Stocks
4.1
0.70.3
2.5
4.8
0.8
0.30.7
0.30.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
08/09 10/11 12/13 14/15 16/17 18/19
MM
T
EU-27 Situation
9.9 12.7 15.6 10.9 14.4
157 160145
152145
35.5 34.727.3 23.3 27.5
0
20
40
60
80
100
120
140
160
180
200
08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19
MM
T
Beginning stocks Production Imports Exports Domestic use
EU-27 Ending Stocks
19.4
12.7
15.6
10.9
14.4
10.4
0
5
10
15
20
25
08/09 10/11 12/13 14/15 16/17 18/19
MM
T
Russia Situation
5.2 6.3 5.6 10.8 10.2
5961
73
85
67
25.5 27.8
41.034.0
0
10
20
30
40
50
60
70
80
90
100
08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19
MM
T
Beginning stocks Production Imports Exports Domestic use
Russia Ending Stocks
13.7
6.35.6
10.8 10.2
4.8
0
5
10
15
20
08/09 10/11 12/13 14/15 16/17 18/19
MM
T
Black Sea Region Situation
Russia, Ukraine and Kazakhstan are the most important wheat producers in the Black Sea Region.
15.8 20.7 16.8 21.2 19.4
112 118 130142 121
51.5 54.468.1
60.0
0
20
40
60
80
100
120
140
160
180
200
07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19
MM
T
Beginning stocks Production Imports Exports Domestic use
Black Sea Exports
18.6 22.8 25.5 27.8
41.034.0
9.811.3
17.418.1
17.5
16.5
8.15.5
7.67.4
8.5
8.5
0
10
20
30
40
50
60
70
80
07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19
MM
T
Russia Ukraine Kazakhstan
Black Sea Ending Stocks
23.3
20.7
16.8
21.219.4
11.6
0
5
10
15
20
25
30
08/09 10/11 12/13 14/15 16/17 18/19
MM
T
U.S. Situation
20.5 26.6 32.1 30.0
56.1
62.8
47.451.2
21.2
28.624.5 26.5
0
10
20
30
40
50
60
70
80
90
100
08/09 10/11 12/13 14/15 16/17 18/19
MM
T
Beginning stocks Production Imports Exports Domestic Use
U.S. Ending Stocks
20.2
16.1
20.5
26.6
32.130.0
26.8
0
5
10
15
20
25
30
35
08/09 10/11 12/13 14/15 16/17 18/19
MM
T
• Major Exporters• Import Demand• U.S. Situation by Class• Outlook
Major World Wheat Importers(from all origins)
0
1
2
3
4
5
6
7
8
9
10
11
12
13
MM
T
2018/19 2017/18
Top 10 Customers for U.S. Wheat
5-year average
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
MM
T
Source: USDA FAS export sales report July 12, 2018.
Top 10 Customers for U.S. Wheat
Year-to-date
0.0
0.5
1.0
1.5
MM
T
2018/19 2017/18
Top 10 Customers for U.S. Wheat
2017/18 vs. 2016/17
Source: USDA FAS 2017/18 Marketing Year Final export sales report May 31, 2018.
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Mexico Japan Philippines Korea Nigeria Indonesia Taiwan China Colombia
MM
T
2017/18 2016/17
World Wheat Imports
Trend in “other” importers denoted ( )
0
20
40
60
80
100
120
140
160
180
200
90/91 94/95 98/99 02/03 06/07 10/11 14/15 18/19
MM
T
"Other" China FSU EU-28
• Major Exporters• Import Demand• U.S. Situation by Class• Outlook
U.S. Wheat Plantings by Class
*Source: USDA Prospective Plantings Report, March 29, 2018
26.5 23.8 23.2
6.65.6 5.9
4.2
4.0 4.1
2.1
2.3 2.0
11.4
10.3 12.1
0
10
20
30
40
50
60
70
2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19*
Mill
ion
Acre
s
HRW SRW White Durum HRS
U.S. Hard Red Winter
16.0 15.8
20.4 17.9
10.1 9.9
0
5
10
15
20
25
30
35
40
45
13/14 14/15 15/16 16/17 17/18 18/19
MM
T
Beginning stocks Production Imports Exports
U.S. Hard Red Spring
6.4 5.2
10.5
15.9
6.27.3
0
5
10
15
20
25
13/14 14/15 15/16 16/17 17/18 18/19
MM
T
Beginning stocks Production Imports Exports
U.S. Soft Red Winter
5.9 5.6
7.9
8.2
2.43.4
0
5
10
15
20
13/14 14/15 15/16 16/17 17/18 18/19
MM
T
Beginning stocks Production Imports Exports
U.S. White
2.9 2.4
7.0 7.1
5.3
5.2
0
2
4
6
8
10
12
13/14 14/15 15/16 16/17 17/18 18/19
MM
T
Beginning stocks Production Imports Exports
U.S. Durum
1.0 1.0
1.52.0
1.4
1.1
0.50.7
0
1
2
3
4
5
13/14 14/15 15/16 16/17 17/18 18/19
MM
T
Beginning stocks Production Imports Exports
U.S. Wheat Sales by Class(year-to-date)
Source: USDA FAS export sales report July 12, 2018.
0.0
1.0
2.0
3.0
4.0
HRW HRS White SRW Durum
MM
T
2018/19 2017/18
U.S. Wheat Ending Stocks by Class
0
2
4
6
8
10
12
14
16
18
HRW HRS SRW White Durum
MM
T
13/14 14/15 15/16 16/17 17/18 18/19
U.S. Wheat Supply and Demand
17/18 18/19 17/18 18/19 17/18 18/19
Beginning Stocks 16.0 15.8 6.4 5.2 5.9 5.6Production 20.4 17.9 10.5 15.9 7.9 8.2Imports 0.2 0.4 2.0 1.5 0.5 0.4Supply Total 36.6 34.1 18.9 22.6 14.3 14.2
Domestic Use 10.7 12.8 7.5 7.5 6.2 6.2Exports 10.1 9.9 6.2 7.3 2.4 3.4Use Total 20.8 22.8 13.7 14.9 8.7 9.6Ending Stocks 15.8 11.4 5.2 7.7 5.6 4.6Stocks-to-Use 76% 50% 38% 52% 64% 48%
HRW HRS SRW
MMT
U.S. Wheat Supply and Demand
17/18 18/19 17/18 18/19 17/18 18/19
Beginning Stocks 2.9 2.4 1.0 1.0 32.1 29.9Production 7.0 7.1 1.5 2.0 47.4 51.2Imports 0.2 0.3 1.4 1.1 4.3 3.7Supply Total 10.1 9.8 3.9 4.1 83.8 84.8
Domestic Use 2.4 2.6 2.4 2.3 29.3 31.5Exports 5.3 5.2 0.5 0.7 24.5 26.5Use Total 7.7 7.7 2.9 3.0 53.8 58.0Ending Stocks 2.4 2.0 1.0 1.1 29.9 26.8Stocks-to-Use 31% 26% 34% 37% 56% 46%
MMT
White Durum Total
U.S. FOB Gulf Prices
100
150
200
250
300
350
400
Jun-15 Oct-15 Feb-16 Jun-16 Oct-16 Feb-17 Jun-17 Oct-17 Feb-18 Jun-18
$/M
etric
Ton
HRW ords HRS 14% SRW
U.S. FOB PNW Prices
100
150
200
250
300
350
400
Jun-15 Oct-15 Feb-16 Jun-16 Oct-16 Feb-17 Jun-17 Oct-17 Feb-18 Jun-18
$/M
etric
Ton
HRW 11.5% HRS 14% SW
SRW and Soft White Prices
100
120
140
160
180
200
220
240
260
280
300
Jun-15 Oct-15 Feb-16 Jun-16 Oct-16 Feb-17 Jun-17 Oct-17 Feb-18 Jun-18
$/M
etric
Ton
SW SRW
U.S. Gulf Basis Prices
-50
0
50
100
150
200
Jun-14 Jun-15 Jun-16 Jun-17 Jun-18
$/M
etric
Ton
HRS 13.5 HRW 12 SRW
U.S. PNW Basis Prices
0
50
100
150
200
250
Jun-14 Jun-15 Jun-16 Jun-17 Jun-18
$/M
etric
Ton
HRS 14 HRW 12
• Major Exporters• Import Demand• U.S. Situation by Class• Outlook
U.S. Wheat Area and Production
15.2 16.0
47.4
51.22.9
3.5
3.13.2
2.0
2.2
2.4
2.6
2.8
3.0
3.2
3.4
3.6
15
25
35
45
55
65
75
98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15 16/17 18/19
MT/
hect
ares
Prod
uctio
n (M
MT)
and
Har
vest
ed A
rea
(mh)
Harvested Area Production Yield
U.S. Crop Planted Area Comparison
*Source: USDA Acreage Report June 29, 2018
23.022.420.6
18.519.1
38.8 38.136.5 36.1
30.9
33.8
36.536.3
15.0
20.0
25.0
30.0
35.0
40.0
45.0
96/97 98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15 16/17 18/19*
Milli
on H
ecta
res
Wheat Corn Soybeans
World WheatProduction, Use and Trade
735752 758
736711
739 742 749
173
183 182185
100
110
120
130
140
150
160
170
180
190
200
500
550
600
650
700
750
800
08/09 10/11 12/13 14/15 16/17 18/19
Trad
e (M
MT)
Prod
uctio
n an
d U
se (M
MT)
Production Use Trade
World CornProduction, Use and Trade
973 10
78
1034
1054
970 10
61
1070
1094
120
160 150158
0
20
40
60
80
100
120
140
160
180
0
200
400
600
800
1000
1200
08/09 10/11 12/13 14/15 16/17 18/19
Trad
e (M
MT)
Prod
uctio
n an
d U
se (M
MT)
Production Use Trade
World SoybeansProduction, Use and Trade
314 34
8
337 35
9
314 32
9 339 35
4
133147
152 157
0
20
40
60
80
100
120
140
160
180
0
50
100
150
200
250
300
350
400
08/09 10/11 12/13 14/15 16/17 18/19
Trad
e (M
MT)
Prod
uctio
n an
d U
se (M
MT)
Production Use Trade
Ocean Freight Rates for Grains
0
10
20
30
40
50
60
70
$/m
etric
ton
PNW to Japan Gulf to Middle East Great Lakes to East Med Gulf to West Africa
Summary• Global production to fall for first time in 5 years
• EU wheat production to fall to 145 MMT, 4% below 2017/18• Wheat production in the U.S. to reach 51.2 MMT, 8% below the 5-year average
• Global ending stocks to decline to 261 MMT, still 10% above the 5-year average
• Ending stocks in Russia to fall to 4.82 MMT, 37% below the 5-year average, if realized• U.S. ending stocks to decrease to 26.8 MMT, down 10% from 2017/18, if realized
• World consumption and trade expected to hit new records in 2018/19
• Canadian 2018/19 wheat exports to reach 24.5 MMT, up 7% year over year• U.S. 2018/19 exports to total 26.5 MMT, 2% above the 5-year average, if realized