There may still be additional downside in what is an already much smaller 2022-23 US wheat export forecast.
According to USDA export sales data, US wheat export sales total commitments - outstanding sales along with accumulated exports- amounted to 15.1 million tonnes as of Jan. 5, down 7% from the same time last year and representing 71% of the full marketing year estimate of 775 million bu, or 21.1 million tonnes. (See graph below).
That is lower than the percentage of the wheat export estimate met by total commitments at the same point in nine of the last 10 years, “suggesting that U.S. wheat may need a slightly stronger pace of sales in the coming months to meet the current projection,” the USDA said in its January Wheat Outlook.
If accurate, projected 2022-23 US wheat exports would be the lowest in 51 years, weighed down by tight domestic supplies and a huge crop in Russia that is being offered up to world markets at deeply discounted prices.
The Wheat Outlook notes US wheat exports to Brazil could still benefit from reduced shipments from Argentina, where 2022-23 production was slashed by drought. However, it also admitted Brazil’s import needs are reduced this year with record-large production of its own and the fact other competitors remain for that market, including Russia. US sales to the Philippines and Nigeria have been historically low this marketing year, it added, driven partly by record crops not only in Russia, but Australia as well.
Meanwhile, in addition to just lukewarm export demand, wheat prices are also being held down by a larger US winter wheat seeded area for harvest this summer. In a report earlier this month, the USDA estimated US winter wheat planted area for 2023 at 36.95 million acres, up 11% from 2022 and the highest since 39.681 million acres in 2015.
More recent pressure on wheat – with the March future of the benchmark Chicago market falling to its lowest in 16 months on Monday – has come from improving weather on the US southern Plains where drought has been threatening winter wheat production.