The 2020/21 wheat marketing year world wheat harvest has started in India, Pakistan, Eastern Asia, and North Africa. When the 2020/21 U.S. hard red winter wheat harvest reaches the Oklahoma/Texas border (about June 1), 25% of the world’s wheat harvest will have been harvested. 

The world’s wheat harvest is projected to begin with enough wheat in storage to meet world demand for 4.7 months (39% stocks-to-use ratio). The USDA projects 2019/20 world wheat ending stocks to be a record 10.8 billion bushels. 

The International Grains Council projects 2020/21 wheat marketing year world wheat production to be a record 28.2 billion bushels. The total 2020/21 marketing year world wheat supply is projected to be a record 39 billion bushels (28.2 + 10.8). Using the world’s record 2019/20 wheat use of 27.5 billion bushels, 2020/21 world wheat ending stocks is projected to be a new record of 11.5 billion bushels. 

Even with projected 2020/21 record world wheat stocks, the market is still offering to forward contract 2020 harvested wheat for $4.82 in Burlington, Oklahoma, $4.72 in Perryton, Texas, and $4.62 in Snyder, Oklahoma. The forward contract basis for the KC July wheat contract is a minus 20 cents in Burlington, a minus 30 cents in Perryton, and a minus 40 cents in Snyder. 

The EU is the largest producer of wheat. The European Commission forecasts that EU’s supply of soft wheat will decline by 176 million bushels during the 2020/21 wheat marketing year. Poor planting conditions in the northwestern regions have resulted in reduced planted acres. Given that the EU’s ending stocks-to-use ratio is projected to be 6%, EU’s market cannot afford any weather-related major incidents for production in the coming season. Collapse in fuel demand and oil prices has also reduced the EU’s expected wheat use in ethanol. 

The COVID-19 pandemic and the weather have both impacted India’s wheat harvest. India is the world’s third-largest wheat producer (4.2 billion bushels). India’s harvest was delayed by a shortage of workers and equipment due to the pandemic, and then rain reduced the quality and quantity of its wheat. India is still predicted to harvest a record crop in 2020.  

Russia is the fourth-largest producer of wheat. Russia’s 2020 wheat production is projected to be between 2.85 and 2.94 billion bushels, an increase of 150 to 240 million bushels over 2019 production. 

Ukraine’s wheat production is projected to be slightly less than in 2019, and Kazakhstan’s production is projected to be slightly higher. Black Sea exporters (Russia, Ukraine, and Kazakhstan) produced 4.2 billion bushels of wheat in 2019 and exported 2.2 billion bushels (33% of the world’s wheat). 

Reports indicate that Russia’s 2019/20 exportable wheat supply will be depleted in May. Ukraine’s exportable 2019/20 wheat supply is reported to be close to depletion. 

Reports also indicate that Russia may limit wheat exports during the 2020/21 marketing year. Russia’s 2019/20 ending stocks-to-use ratio is projected to be 11%. Ukraine’s stocks-to-use ratio is projected to be 4%. 

Egypt is the largest importer of wheat and buys the majority of its imported wheat from Black Sea exporters followed by the EU and Romania. Recent news articles report that Egypt may increase wheat imports to increase its wheat reserves. Other importing countries are also reported to be building wheat stocks. 

In the midst of projected record and excessive 2020/21 world wheat stocks, a window of demand for U.S. wheat may be open during the June through August time period. However, the world wheat supply and demand news could also imply that the window of price support may close when exportable foreign wheat comes on the market in late August.