USDA Anticipates Higher Wheat Prices for U.S. Growers

(ARLINGTON, VA) Higher prices are expected for wheat growers in 2019. That’s according to data presented during the 95th Annual USDA Agricultural Outlook Forum, where the outlook for U.S. wheat is for reduced supplies, minimally lower use, and decreased ending stocks. Domestic wheat production is projected one percent higher from last season at 1.9 billion bushels. This is despite another USDA report (NASS Winter Wheat and Canola Seedings report) showing 2019 winter wheat planted area at the lowest level since 1909. Higher expected net returns for spring wheat compared to soybeans in the Northern Plains may result in greater spring wheat plantings in 2019 with total wheat acreage projected at 47.0 million acres, down two percent from last year. The all-wheat yield is projected slightly higher, 47.8 bushels per acre based on a linear trend. The higher yield coupled with an increased harvested area at 39.8 million acres offsets reduced planted area to raise this season’s production from last year. Greater export competition though is seen from Australia and the EU as both recovers from last year’s drought. Although total use falls slightly, reduced supplies will result in ending stocks declining by seven percent to 944 million bushels. While stocks remain burdensome, stronger export competition is expected to result in a modestly higher season-average farm price of $5.20 per bushel – about a nickel higher than last season.