New Delhi — The US Department of Agriculture raised US wheat ending stock estimates for the 2019-20 marketing year (June-May) from March by 3.2% to 26.4 million mt (970 million bushels), according to its World Agricultural Supply and Demand Estimates report released Thursday.
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The biggest increase in the ending stock levels was seen for the Hard Red Winter wheat grade, the USDA said. HRW ending stock estimates were about 4% higher from March levels, at 13.7 million mt.
The USDA also cut US wheat export estimates for the 2019-20 marketing year by 1.5% from March levels, to 26.8 million mt. The agency attributed the cut to slowing pace and uncompetitive prices in many international markets.
The ending stock estimates were higher than the market expectations of 25.6 million mt, but analysts expected an increase in the US wheat carryout owing to demand drop, especially in exports.
According to the latest USDA export sales report released Thursday, total commitments of the US wheat in the current marketing year stood at 25.04 million mt.
With about eight weeks left of the marketing year, total commitments as of April 2 represent 93.4% of the USDA's total export estimates for 2019-20. Analysts said total commitment seen in March is the lowest level seen in the last eight years.
Total commitments point to cumulative exports plus outstanding sales seen in a year.
With that export volume, the US is still expected to become the world's second-largest wheat exporter, as the EU and Russia may take the joint top position after Russia's exports were slashed by the USDA.
The US is expected to produce 52.25 million mt of wheat in 2019-20, also unchanged from the last two month estimates, the WASDE report showed.
Coronavirus pandemic boosts prices
As the customers stocked up on wheat products amid growing concerns over the coronavirus pandemic, nearby wheat prices remained firm, the USDA said in a separate World Markets and Trade report released Thursday.
The US HRW wheat soared $18/mt from February to $240/mt in March, while Soft Red Winter wheat jumped $10 to $249/mt as supplies remained extremely tight.
Overall, prices of wheat at major exporting countries rose during the month of March, underpinned by rumors of potential market scarcity, according to the report.
"Discussions surrounding potential export restrictions and stockpiling by importers supported prices," the USDA added.
In March, export prices of wheat from Russia, the EU, the US, Canada, Argentina and Australia jumped in the range of 0.8% to 8.1% from February levels, according to the data from the International Grains Council.