Further Tightening for US, Global Wheat Ending Stocks in 2022-23

US and global wheat ending stocks will continue to tighten in 2022-23, according to initial new-crop supply-demand estimates released by the USDA on Thursday. 

At an estimated 619 million bu, US wheat ending stocks would be down 6% from a year earlier and the lowest in nine years, while global ending stocks are expected to decline 5% to the lowest in six years at 267 million tonnes. Both the US and the world wheat ending stocks estimates fell below pre-report trade guesses, with wheat futures trading between 50 and 60 cents higher this afternoon. 

US old-crop wheat ending stocks were revised lower today as well, falling to 655 million bu from 678 million in April. 

US all wheat production for 2022-23 is projected by the USDA at 1.729 billion bu, up 83 million from last year, as higher yields more than offset a slight decrease in harvested area. The all wheat yield, projected at 46.6 bu/acre, is up 2.3 bu from last year. The entire increase in all wheat production is expected to come from a rebound in spring wheat and durum output following last year’s devastating drought on the northern Plains which slashed yields. 

On the other hand, 2022 US winter wheat output is seen falling 8% on the year as lower Hard Red Winter and Soft Red Winter production more than offset an increase in White Wheat production. Abandonment for winter wheat is the highest since 2002, the USDA said, with the highest levels in Texas and Oklahoma. Winter wheat area expected to be harvested this year is forecast at 24.5 million acres, down 4% from last year. 

As of May 1, the US average winter wheat yield is estimated at 47.9 bu/acre, down 2.3 bu from last year's average yield of 50.2 bu.  

Hard Red Winter production, at 590 million bu, is projected to fall a hefty 21% from a year ago amid ongoing drought on the US southern Plains. Soft Red Winter, at 354 million bu, is expected down a more modest 2% on the year while White Winter output is projected to jump 38% to 230 million bu. 

Total US domestic wheat use in 2022-23 is projected down 1% from last year to 1.11 billion bu on lower feed and residual use more than offsetting higher food use. Exports are projected at 775 million bu, down from revised 2021-22 exports and would be the lowest since 1971-72. 

New-crop global wheat production is forecast at 774.8 million tonnes, 4.5 million lower than in 2021-22, as smaller crops in Ukraine, Australia, and Morocco is only partly offset by increases in Canada, Russia, and the US. Production in Ukraine is forecast at 21.5 million tonnes in 2022/23, 11.5 million lower than 2021-22 due to the ongoing war. Canada’s production is forecast to rebound to 33 million tonnes, up sharply from last year’s drought-affected crop. 

Projected 2022-23 world wheat use is slightly lower at 787.5 million tonnes, as increases for food use are more than offset by declining feed and residual use. The largest feed and residual use reductions are in China, the European Union, and Australia as well as a sizeable decline in food use in India. Forecasted 2022-23 global trade is a record 204.9 million tonnes, up 5 million from last year. Imports are projected to rise on increased exportable supplies from Russia and Canada more than offsetting reductions for Ukraine and Australia. 

Russia is projected as the leading 2022-23 global wheat exporter at 39 million tonnes, followed by the European Union, Australia, Canada, and the US. Ukraine’s 2022-23 export forecast is 10.0 million tonnes, down sharply from 19 million last year on reduced production and significant logistical constraints for exports. 

Source: DePutter Publishing Ltd.

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