Global wheat production is up this month mainly from larger crops in India and Russia, which more than offset smaller crops for Australia and Canada. Global trade is forecast down as global wheat supplies tighten. Imports are lowered for Indonesia. Exports are forecast lower for Australia and Canada. The U.S. season-average farm price is unchanged at $5.10 per bushel.

The U.S. 2018/19 wheat supply and demand estimates are unchanged from last month. There are offsetting by-class changes for both exports and imports. The season average farm price range is unchanged at the midpoint of $5.10 per bushel and the range is narrowed $0.20 per bushel to $4.70 to $5.50.

Global wheat supplies for 2018/19 are raised 4.7 million tons on a 3.4-million-ton production increase and higher beginning stocks. The Russian crop is raised 3.0 million tons on harvest results to date in the winter wheat region and continued excellent weather in the spring wheat belt. Kazakhstan is raised 0.5 million tons also on excellent spring wheat conditions. Production is increased 2.7 million tons in India to a record 99.7 million on updated government data.

These increases are partially offset by a 2.0-million-ton decrease in Australia and a 1.0-million-ton decrease in Canada, both reflecting continued dry conditions during the growing season. Global exports are lowered 2.5 million tons with a 2.0-million-ton reduction for Australia and a 0.5-million-ton reduction for Canada, both on smaller crops. Indonesia and Iran imports are down 1.0 million tons and 0.5 million tons, respectively.

Global use is raised 2.3 million tons primarily on a 2.0-million-ton increase for Russia feed and residual use and a 1.0-million-ton increase for EU feed and residual use. With total supplies rising faster than use, global ending stocks are raised 2.3 million tons to 261.3 million but are 5 percent below last year’s record.

Exporter prices were mostly stable at the end of August, except for Australia and the United States. Drought in Australia has driven its prices up rapidly, as domestic food and feed demand are prioritized over exports.

U.S. export prices are down from August, narrowing the spread between U.S. wheat and EU and Black Sea wheat. Black Sea prices remained stable and are the most competitive wheat on the international market.

However European wheat prices extended its losses on Thursday after a bearish US government report released the previous day and also penalised by the rise of the euro to a two-week high, dented its competitiveness on world markets.