U.S. Wheat Outlook Sees Lower Supplies, Stable Exports by Amit Gupta, Kedia Advisory
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The 2024/25 U.S. wheat outlook reflects reduced supplies, driven by lowered production and smaller beginning stocks. While domestic use is set to rise due to increased feed and residual use, exports remain steady at 825 million bushels. Consequently, ending stocks are projected to decrease to 812 million bushels, still 17% higher than the previous year. On the global front, wheat production is expected to decline in major regions such as the EU, Russia, India, and Brazil, partially offset by gains in Ukraine and Russia's beginning stocks. Global consumption and trade are down, while ending stocks slightly increase, marking the lowest since 2015/16.
Key Highlights
* U.S. wheat supplies reduced to 2,783 million bushels.
* Domestic use rises on higher feed and residual use.
* U.S. wheat exports unchanged at 825 million bushels.
* Global wheat production declines in key regions.
* Global wheat ending stocks slightly increase but remain historically low.
U.S. wheat prices have been experiencing pressure as the latest outlook for the 2024/25 marketing year forecasts reduced supplies. U.S. production is projected to fall by 11 million bushels, totaling 1,971 million. This drop, along with lower beginning stocks, reduces overall supplies by 6 million bushels, now pegged at 2,783 million. Despite higher imports of 115 million bushels, the tighter supply picture keeps upward pressure on wheat prices.
Supporting these trends, domestic use is expected to increase by 10 million bushels, driven largely by higher feed and residual use. The USDA’s Grain Stocks report highlighted a year-on-year increase in wheat disappearance during the June-August period, a key factor bolstering domestic demand. This uptick in usage could support price stability in the coming months.
Globally, wheat markets are seeing reduced production across major regions, particularly in the EU, Russia, India, and Brazil. However, stronger output from Ukraine and higher beginning stocks in Russia offer some relief. Despite reduced trade, global ending stocks are set to rise marginally, although they remain at their lowest levels since 2015/16.
Finally
U.S. wheat prices are likely to find support from reduced supplies and higher domestic use, while global production trends signal tight markets ahead.
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