Due to bad weather, Russia’s wheat crop will be one-fifth smaller than last year. But Russia will remain the No. 1 wheat exporter in the world while the EU pushes the United States into third place, according to a USDA forecast released Tuesday. In its monthly WASDE report, the USDA said farm-gate prices for this year’s U.S. corn, wheat and soybean crops would be the highest since the commodity slump began early this decade.
Prospects for U.S. crops improved in the face of strong global demand and harvest setbacks for some U.S. competitors. For example, U.S. wheat exports for the current marketing year were forecast at 950 million bushels, up 25 million bushels since the May estimate, because Russia will have to cut into its stockpiles to keep exports flowing. Shipments are forecast at 35 million tonnes this trade year, compared to 40.5 million tonnes in 2017/18, “but Russia still remains the world’s leading wheat exporter,” said the USDA.
Hot and dry weather during April and May damaged Russia’s winter wheat crop, while slower-than-usual fieldwork in Siberia will reduce the amount of land sown for spring wheat. Winter wheat accounts for 70 percent of Russian wheat, with harvest typically beginning in late June and concluding in mid-August. Spring wheat is harvested from late August through October.
The EU has problems of its own that will retard wheat production, chiefly dry spring weather in Germany and Poland. Even so, it was forecast to export 29 million tonnes during the current trade year, up 5 million tonnes from last year. The United States was the second-largest exporter last year with 24.5 million tonnes, and would be No. 3 this year with 25.9 million tonnes, according to USDA data.
After Russia, the EU and the United States, the leading wheat exporters are Canada, Australia, Argentina and Ukraine. The world wheat crop will total 748 million tonnes this year, down 10 million tonnes from last year. U.S. wheat production is projected at 1.827 billion bushels this year, the second-smallest crop in 12 years because low prices and ample supplies have discouraged plantings. With the upturn in wheat exports, the season-average wheat price was forecast at $5.10 a bushel, highest in four years.
Corn exports are forecast at 2.3 billion bushels, the highest in 10 years, for the ongoing 2017/18 trade year, said USDA. “Exports during the month of April were record high … Export inspection data for the month of May implies continued robust global demand for U.S. corn” and the ledger of corn under contract for export is at record levels. With continued strong demand, this year’s corn crop would fetch an average $3.90 a bushel, highest in five years.
The year’s soybean crop would sell for an average $10 a bushel at the farm gate, highest since $10.10 a bushel in 2014/15, forecast USDA. Strong export and domestic demand will work through the largest soybean stockpile in a decade, said USDA.