The US supply-demand picture is unchanged from last month, but dryness and declining production prospects in key exporting countries have tightened the 2023-24 world wheat outlook substantially.
The USDA in its monthly supply-demand outlook on Tuesday hacked its 2023-24 global wheat supply estimate by 7.2 million tonnes from last month, with expected production falling to 787.34 million tonnes from 793.37 million in August and 790.59 million a year earlier. If accurate, it would be the first year-to-year decline in global wheat production since 2018-19.
With a smaller crop – and projected demand little changed - the USDA is now projecting 2023-24 global wheat ending stocks at 258.61 million tonnes, down from 256.61 million in August, 267.13 million a year ago and potentially the lowest since 2015-16. “Ending stocks are tightened in many countries this month, particularly for several major wheat exporters,” the USDA said.
Expected Canadian wheat production for 2023-24 is down 2 million tonnes this month to 31 million, based on the initial model-based forecast by Statistics Canada back in August. (StatsCan will release an updated forecast later this week). Forecasted Australian output was lowered 3 million tonnes from August to 26 million, as dry weather this past month in Western Australia, New South Wales, and Queensland has cut into yield prospects. Argentina is down 1 million tonnes from last month to 16.5 million, also because of dry weather.
On the other hand, Ukraine wheat production was raised this month to 22.5 million tonnes from 21 million in August and 21.5 million a year ago. Russia production was held steady from last month at 85 million tonnes, with exports projected up 1 million tonnes to 49 million (46 million in 2022-23).
For the US, projected 2023-24 ending stocks are steady from August at 615 million bu, up from 580 million a year earlier but largely in line with trade guesses. The projected 2023/24 season-average farm price is also unchanged from last month at $7.50/bu. Wheat futures were trading a few cents higher this afternoon.
