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Analyst Insights Analyst Insights May WASDE: 2019/20 Stocks Projected 400k Below Target

May 13, 2020

2 min read

May WASDE: 2019/20 Stocks Projected 400k Below Target

546 words / 2.5 minute reading time

  • The May WASDE projection expects a major shortfall in imports from Mexico and has not altered consumption estimates.
  • This means the USA need to import a further 400k tons this season to reach the targeted 13.5% stocks to use.
  • Early estimates for 2020/21 expect a rebound in domestic production but Mexican imports will depend on opening stock levels.  

May WASDE Release – 2019/20   

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  • The significant change in the WASDE report is a further reduction in expected exports from Mexico, down 150k short tons.
  • The early decline in Mexican production has prompted the USDA to reduce their import expectations to 1m short tons.
  • To date Mexico has exported 760k tons under their quota to the USA.
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Weekly Mexican Sugar Production

  • The USDA will need to once again increase imports further into the country to reach 13.5% closing stocks.
  • A further refined sugar TRQ quota as well as further raw TRQ quota expansion seems likely.
  • US Imports this season are already at record levels and the refined TRQ quotas have all been oversubscribed.
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  • If the US allows a further 400k tons to be imported duty free, imports into the country will make up 30% of total supply.
  • This is unless the USDA is expecting to reduce consumption at a later stage.
  • A 2% fall in consumption would reduce import needs by 250k tons.

2020/21 Projection  

  • The May Forecast is also the first look at expectations for 2020/21.
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  • The USDA expects a significant rebound in domestic production, particularly in the beet sector.
  • Whilst Mexico is currently allocated 1.6m tons, this will fall by 400k tons if closing stock targets are met.
  • Domestic production is going to be closely watched in the next 7 months.
  • The beet forecast could have been at 150k tons higher, but the plantings this season have been delayed.
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  • In certain northern states the spring has been cold and wet, preventing the beet going in the ground earlier.
  • A prolonged planting season means the beet needs to stay in the ground for longer, increasing weather risk.
  • Plantings in North Dakota is particularly behind.
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  • A dry summer and a mild autumn would mean the beet crop may rebound more than currently expected.
  • You can follow the planting rate here

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