The USDA raised its forecast for wheat production and inventories, but may raise them again in January

Market participants did not expect significant changes in the December USDA wheat balance sheet, but production forecasts for Russia, Australia and Canada were raised in accordance with official data from local governments, and for Argentina the forecast was left unchanged, so in the January balance sheet, the estimate of world production may be increased again.

In the new report forecast initial inventory wheat in my 2021/222 increased by 1.69 million tons to 289.64 million tons (295.98 million tons in my 2020/21 and 280.7 million tons in my 2019/20) due to the revision of production and consumption volumes in my 2020/21 season.

Forecast world-class production wheat in my 2021/22 increased by 2.61 million tons to 777.89 million tons (775.9 million tons in my 2020/21 and 763.5 million tons in my 2019/20), in particular for Australia by 2.5 million tons to a record 34 million tons (33.3 million tons in my 2020/21), Canada – by 0.7 million tons to 21.7 million tons, the EU – by 0.3 million tons to 138.7 million tons (126.01 million tons in 2020/21 mg) and Russia – by 1 million tons to 75.5 million tons (85.35 million tons in 2020/21 mg), although according to official data, more than 79 million tons of wheat have already been harvested. For Argentina, the production forecast was left at 20 million tons, while experts of the Rosario Exchange raised it from 20.4 to 22.1 million tons.

Forecast global consumption wheat in my 2021/22 increased by 1.93 million tons to 789.35 million tons (782.25 million tons in my 2020/21 and 748.33 million tons in my 2019/20) due to increased consumption of feed wheat in Australia, the EU and Russia.

Forecast World Trade wheat increased by 2.3 million tons to a record 205.5 million tons due to an increase in the export estimate for Australia by 2 million tons to 25.5 million tons, the EU – by 0.5 million tons to 37 million tons, India – by 0.25 million tons to 5.25 million tons and Ukraine – by 0.2 million tons to 24.2 million tons, while for the United States it was reduced by 0.55 million tons to 22.86 million tons due to low export rates. For Russia, the export forecast was left at 36 million tons, although local analysts estimate its maximum at 30-31 million tons.

The forecast for wheat imports was raised by 1.9 million tons to a record 202.96 million tons (194.18 million tons in my 2020/21) due to an increase in Iran's imports by 1.5 million tons to a record 7 million tons due to a reduction in its own production.

Rating global final reserves wheat in the 2021/22 season increased by 2.38 million tons to 278.18 million tons (289.94 million tons in 2020/21 mg and 299.22 million tons in 2019/20 mg), while the average forecast of analysts was only 276.3 million tons.

The report's data accelerated the fall in stock prices, and March futures declined:

• from 4.5 € / T to 282.5 € / t or 319 EUR / t on Paris Euronext,
• by 6 6.61 / ton to Чикаго 285.4/ton for soft winter SRW wheat in Chicago,
• by 7 7.5/ton to 3 336.5 / ton for Black Sea wheat in Chicago.

The bearish balance of the USDA will lead to lower wheat prices in the near future, especially given the increased supply of Australian and Argentine wheat of the new crop.