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September 1, 2015
Grain Market Outlook
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Trade Weighted U.S. Dollar Index
Major Currencies, Index March 1973=100, Daily, Not Seasonally Adjusted
Source: St. Louis Federal Reserve Bank (FRED)
U.S. Dollar Index (Trade Weighted)
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I‐C. U.S. Wheat Production
U.S. Wheat Planted Acreage
The USDA’s projections of 2015 U.S. wheat planted acres from the March 31st Prospective Plantings report
were adjusted upward in the USDA June 30th Acreage report, and have since been used without adjustment in
the July 10th and August 12th USDA Crop Production and WASDE reports. In the June 30, 2015 USDA Acreage
report and subsequent July and August Crop Production reports the USDA projected that 2015 U.S. wheat
total planted acreage would be 56.079 million acres (ma), up 712,000 acres from 55.367 ma projected earlier
in the March 31st USDA Prospective Plantings report. This projection of 56.079 ma of 2015 U.S. wheat
planted area is down 743,000 acres (‐1.3%) from 56.822 ma in 2014, down 157,000 acres (‐0.3%) from 56.236
ma in 2013, but up from 55.294 ma in 2012, 54.277 ma in 2011, and the 6 year low of 52.620 ma in 2010
(Table 1 and Figures 3 and 4).
The USDA left unchanged from the June 30th Acreage Report and the July 10th WASDE report its forecast of
2015 U.S. winter wheat plantings to 40.620 ma – down 131,000 acres from the USDA March 31st Prospective
Plantings report estimate, and down 1.779 ma (‐4.2%) from 42.399 ma in 2014, and down 2.610 ma (‐6.0%)
from 43.230 ma in 2013. Of this total, 29.57 ma are projected to be seeded to Hard Red Winter (HRW) wheat
in 2015, down approximately 4% from 30.47 ma in 2014, and down marginally from 29.67 ma in 2013. Soft
Red Winter (SRW) wheat planted acreage is projected to be 7.61 ma, down 10.5% from 8.50 ma in 2014, and
down 22.8% from 10.04 ma in 2013. For 2015, USDA projects there to be 4.30 ma of all white wheat planted,
with 3.433 ma of white winter (WW) wheat, and approximately 867,000 acres of spring white (SW) wheat. All
acreage planted of U.S. white wheat in 2015 of 4.30 ma is forecast to be up marginally from 4.21 ma in 2014.
The USDA projected that total U.S. other spring wheat plantings in 2015 amount to 13.505 ma, up
480,000 acres (+3.7%) from 13.025 ma in 2014, and up 1.363 ma (+11.7%) from 11.606 ma in 2013. Of this
total, 12.65 ma are seeded to Hard Red Spring (HRS) wheat, up from 12.25 ma in 2014, and up from 10.94 ma
in 2013.
Durum wheat plantings in the U.S. in 2015 are projected by the USDA to be 1.954 ma in 2015, up 556,000
acres (+39.8%) from 1.398 ma in 2014, and up 554,000 acres (+39.6%) from 1.400 ma in 2013.
U.S. Wheat Harvested Acreage
The USDA’s projections of 2015 U.S. wheat harvested acres from the June 30th Acreage report were also
used without adjustment in the July 10th and August 12th USDA Crop Production and WASDE reports. In the
June 30, 2015 USDA Crop Production report the USDA projected that 2015 U.S. wheat total harvested acreage
would be 48.454 million acres (ma), up 2.073 ma (+4.5%) from 46.381 ma in 2014, and up 3.122 ma (+6.9%)
from 45.332 ma in 2013 (Table 1 and Figures 3 and 4).
Aggregated total U.S. percent harvested‐to‐planted acreage in the U.S. was estimated to be 86.4% in 2015,
up from 81.6% in 2014, 80.6% in 2013, and comparable to the range of 76.0%‐89.1% (average = 84.1%, median
= 84.4%) over the 2000‐2014 period (Table 1 and Figure 4). The proportion of harvested‐to‐planted U.S.
wheat acreage in 2013 of 80.6% was the lowest since 81.6% in 2006 and 76.0% in 2002.
The USDA forecast 2015 U.S. winter wheat harvested acreage at 33.329 ma – up 1.025 ma (+3.2%) from
32.304 ma in 2014, and up 0.679 ma (+2.1%) from 32.650 ma in 2013. Of this total, 23.61 ma were projected
to be Hard Red Winter (HRW) wheat in 2015, up 7.7% from 21.92 ma in 2014, and up from 20.39 ma in 2013.
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Soft Red Winter (SRW) wheat harvested acreage was projected to be 6.44 ma, down 10.1% from 7.16 ma in
2014, and down 27.8% from 8.92 ma in 2013. In 2015, USDA projects there to be 3.222 ma of all white wheat
harvested, with 3.277 ma of white winter (WW) wheat, and approximately 834,000 acres of spring white (SW)
wheat. All acreage harvested of U.S. white wheat in 2015 of 4.11 ma is up marginally from 3.97 ma in 2014.
The USDA projected that total U.S. other spring wheat harvested area in 2015 would be 13.217 ma, up
477,000 acres (+3.7%) from 12.740 ma in 2014, but up 1.873 ma (+16.5%) from 11.344 ma in 2013. Of this
total, 12.38 ma are Hard Red Spring (HRS) wheat, up from 11.99 ma in 2014, and from 10.70 ma in 2013.
Durum wheat harvested area in the U.S. in 2015 was projected by the USDA to be 1.908 ma in 2015, up
571,000 acres (+42.7%) from 1.337 ma in 2014, and up 570,000 acres (+42.6%) from 1.338 ma in 2013.
U.S. Wheat Yields & Production
The USDA projected that 2015 U.S. average wheat yields would be 44.1 bushels per acre (bu/ac) – down
from a USDA projection of 44.3 in July, but up from 43.5 bu/ac in May. This decrease in projected 2015 U.S.
wheat yields reflected mainly lower than expected 2015 U.S. Soft Red Winter wheat production in the eastern
Corn Belt due to problems stemming from excessive late season rain and cool weather. This projection of 2015
U.S. wheat yields of 44.1 bu/ac is up from 43.7 bu/ac in 2014, but less than the record high of 47.1 bu/ac in
2013, and the previous record of 46.2 bu/ac in 2012 (Table 1 and Figure 5).
Based on this combination of projections for 2015 planted acreage (56.079 ma), harvested acreage (48.454
ma), and yield (44.1 bu/ac), 2015 U.S. wheat production is projected to be 2.136 billion bushels (bb). This
projection of 2015 U.S. wheat production of 2.136 bb is down 12 mb from July, but up 15 mb from June, up 49
mb from May, up from 2.026 bb in 2014, and within the 2004‐2014 range of 1.808‐2.512 bb (average = 2.128
bb, median = 2.135 bb) (Table 1 and Figure 6).
I‐D. U.S. Wheat Total Supplies
Total supplies of U.S. wheat of 3.014 bb are projected by the USDA for “new crop” MY 2015/16 (down 17
mb from July), resulting from beginning stocks of 753 mb, projected 2015 production of 2.136 bb, and
projected imports of 125 mb (Table 1 and Figure 6). Over the last ten (10) marketing years, U.S. wheat total
supplies have been 2.501 bb in MY 2006/07, 2.620 bb in MY 2007/08, 2.945 bb in MY 2008/09, 2.984 bb in MY
2009/10, 3.236 bb in MY 2010/11, 2.968 bb in MY 2011/12, 3.118 bb in MY 2012/13, 3.022 bb in MY 2013/14,
2.760 bb in MY 2014/15, and now are projected to be 3.014 bb in “new crop” MY 2015/16.
Forecast U.S. wheat beginning stocks of 753 mb in “new crop” MY 2015/16 are up 27.6% from 590 mb in
beginning stocks in “old crop” MY 2014/15, and up from 718 mb in MY 2013/14. This projection of 753 mb in
beginning stocks in “new crop” MY 2015/16 is more than double the long term historic low of 306 mb in MY
2008/09 – which resulted from the historically tight U.S. wheat ending stocks situation that occurred in MY
2007/08.
Projected U.S. wheat imports of 125 mb for “new crop” MY 2015/16 is less than 144 mb in MY 2014/15
(2nd highest on record), and the record high of 169 mb in MY 2013/14. Since MY 1973/74 and prior to MY
2013/14, the next highest amounts of U.S. wheat imports have been: 1) 127 mb in MY 2008/09; 2) 123 mb in
MY 2012/13; 3) 122 mb in MY 2006/07; and 4) 119 mb in MY 2009/10.
Nearly all of U.S. wheat imports come from Canada because of favorable geographic location and
associated grain transportation logistics. Large Canadian wheat supplies over the last several years have been
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a major factor in this increase in U.S. wheat imports. Canada produced a record large wheat crop of 37.5
million metric tons (mmt) (or 1.378 bb in 60 lb/bu units) in MY 2013/14, followed by a crop of 29.3 mmt (1.077
bb) in MY 2014/15, with a projection of 26.5 mmt (973 million bushels or ‘mb’) in “new crop” MY 2015/16.
The largest Canadian wheat crops since 1960 that were over 30.0 mmt were in 1986 (31.4 mmt or 1.152 bb),
1990 (32.1 mmt or 1.179 bb), 1991 (31.9 mmt or 1.174 bb), and 2013 (37.5 mmt or 1.379 bb).
I‐E. U.S. Wheat Total Use & Use by Category
Food Use: Projected U.S. wheat food use of 967 mb in “new crop” MY 2015/16 has followed a consistent
upward trend over time due to a) steady growth in the U.S. population, and b) associated increases in demand
for processed wheat products. This projected amount of 967 mb in food use in “new crop” MY 2015/16
follows from 958 mb in MY 2014/15 (down 2 mb from July), 955 mb in MY 2013/14, and from 951 mb in MY
2012/13 (Table 1 and Figure 7).
Seed Use: Forecast seed use of 72 mb in “new crop” MY 2015/16 is down from 81 mb in MY 2014/15, 77
mb in MY 2013/14, and 73 mb in MY 2012/13 (Table 1 and Figure 7). The USDA’s forecast U.S. wheat seed use
extends the historic pattern of there being a relatively small but inelastic demand for U.S. wheat seed, driven
primarily by the amount of U.S. wheat seed needed to plant adequate U.S. wheat acreage each year (from
both commercial and on‐farm seed sources) with consideration for possible production shortfalls.
Exports: Projected U.S. wheat exports of 925 mb in “new crop” MY 2015/16 (down 25 mb from July) are
up from 854 mb in MY 2014/15 (down 1 mb from July) – the lowest amount since 879 mb in MY 2010/11
(Table 1 and Figure 7). Over the last ten (10) marketing years, the U.S. has exported 908 mb of wheat in MY
2006/07, 1.263 bb in MY 2007/08, 1.015 bb in MY 2008/09, 879 mb in MY 2009/10, 1.291 bb in MY 2010/11,
1.051 bb in MY 2011/12, 1.012 bb in MY 2012/13, 1.176 bb in MY 2013/14, an estimate of 854 mb in “old
crop” MY 2014/15, with a projection of 925 mb in “new crop” MY 2015/16.
Some of the factors that have caused lower U.S. wheat exports in “old crop” MY 2014/15 and “new crop”
MY 2015/16 are a) the sharp increase in the value of the U.S. dollar relative to other World currencies, and b)
prospects for fully adequate competitive foreign wheat supplies for export trade purposes. That said, the
uncertain impact on World wheat trade in the future from ongoing geopolitical conflicts (between Russian and
Ukraine), and the potential for dry or adverse weather conditions in other major World wheat production
areas due to the likelihood of an “El Nino” weather pattern in the coming year are both factors that may
eventually support increased U.S. wheat exports and at least somewhat higher World wheat prices in the “new
crop” 2015/16 marketing year. However, until tangible evidence of such potential damage to World wheat
production should occur in late 2015 or 2016, it appears to be treated as a non‐factor in current World wheat
export markets.
Cumulative U.S. wheat export shipments through August 20th – the 13th week of the “new crop” 2015/16
marketing year for U.S. wheat – have totaled 158.3 mb, which is 17.1% of the USDA’s projected “new crop” MY
2015/16 exports of 925 mb, with 25.0% (13 of 52 weeks) of the marketing year completed. The “new crop”
2015/16 marketing year began on June 1, 2015 and will last through May 31, 2016. United States’ wheat
export shipments will need to average 19.7 mb per week through the remainder of the “new crop” 2015/16
marketing year to attain the USDA’s August 12th WASDE projection of 925 mb. Wheat export shipments by the
U.S. of 22.3 mb and 13.1 mb during the weeks ending August 13th and 20th, respectively, were on average (17.7
mb / week) “behind pace” to meet the USDA forecast of 925 mb in the “new crop” 2015/16 marketing year.
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(Source: USDA Foreign Agricultural Service U.S. Weekly Export Sales report ‐ http://apps.fas.usda.gov/export‐
sales/esrd1.html).
In addition, when accounting for unshipped forward sales of exports of 201.4 mb in U.S. wheat for “new
crop” MY 2015/16 (i.e., that had not yet been shipped as of August 20th), total U.S. wheat shipped plus
outstanding shipments added up to 359.7 mb (i.e., 158.3 mb shipped plus 201.4 mb forward sales). This
amounts to 38.9% of the USDA’s projection of 925 mb for “new crop” MY 2015/16 with 25.0% of the
marketing year having already occurred (i.e., 13 of 52 weeks) – presenting a more positive perspective on
potential U.S. wheat export sales and the likelihood of U.S. wheat exports reaching the 925 mb target set by
the USDA in the August 12th WASDE report.
Feed & Residual Use: The USDA projected that U.S. feed and residual use would be 200 mb in “new crop”
MY 2015/16, up from 115 mb for “old crop” MY 2014/15 (up 4 mb from July), down from 223 mb in MY
2013/14, and down from the recent high of 364 mb in MY 2012/13 (Table 1 and Figure 7). Domestic U.S.
wheat feeding had trended lower in “old crop” MY 2014/15 and “new crop” MY 2015/16 due to sizable 2013
and 2014 U.S. corn and grain sorghum crops – which has led to more abundant competitive U.S. feedgrain
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