The USDA again lowered its forecast for wheat production, exports and stocks, but prices rose slightly

In the October balance sheet, as in the three previous reports, USDA experts again lowered their forecasts for wheat production, consumption and stocks. But despite this, stock market quotations grew by 1-2.8%, although they are 30-58% lower than last year's level.

Compared to the September estimates , the wheat balance for the 2023/24 MR underwent the following changes:

• The estimate of initial reserves was increased by 0.42 to 267.55 million tons (272.6 million tons in FY 2022/23) as a result of data adjustments for FY 2022/23.
• The global production forecast was reduced by 3.91 to 783.43 million tons (789.5 million tons in 2022/23 FY, 781.3 million tons in 2021/22 FY and 775.72 million tons in 2020/21 FY), in particular for Australia due to drought - by 1.5 to 24.5 (39.69) million tons, Kazakhstan - by 2 to 13 (16.4) million tons, Brazil - by 0.5 to 9.8 (10.6) million tons, while for the USA the estimate was increased by 2.1 to 49.3 (44.9) million tons. For Ukraine, the forecast was left unchanged, as for the Russian Federation, where local agencies estimate the harvest at 93 million tons, and the USDA - at 85 million tons
• The forecast of world consumption was reduced by 3 to 792.86 million tons (794.62 million tons in 2022/23 MR and 782.22 million tons in 2021/22 MR), primarily due to a decrease in feed and raw material consumption in Kazakhstan and the Russian Federation, then as Ethiopia and Nigeria will see the biggest declines in food, seed and industrial use. For the second season in a row, the volume of consumption will exceed the harvest.
• The estimate of world exports was reduced by 1.04 to 206.3 million tons (221.6 million tons in 2022/23 MR and 202.98 million tons in 2021/22 MR), in particular for Australia – by 1.5 to 17.5 (32.5) million tons, Kazakhstan - by 0.5 to 10 (10.5) million tons, Brazil - by 0.5 to 3 (2.7) million tons, while for the Russian Federation the estimate was increased by 1 to record 50 (47.5) million tons.
• The estimate of world imports was reduced by 1 to 204.62 (209.54 and 199.37) million tons.
• The forecast of world ending stocks has been reduced by 0.5 to 258.13 (267.55) million tons, which will be the lowest indicator since 2015/16 MR, although analysts estimate them at 258.4 million tons. Thus, for the United States, the estimate of reserves has been increased by 1.5 million tons, and for Kazakhstan and the Russian Federation it was reduced by 1.1 and 1.5 million tons, respectively.

For China, the balance sheet was left unchanged, although some analysts expected forecasts to be adjusted due to heavy rains.

December futures rose yesterday:

• by 2.8% to $210/t - for soft winter SRW wheat in Chicago (-2.8% compared to the data after the August report, -58% for the year)
• by 1.2% to $248/t - for hard winter HRW wheat in Kansas City (-8.3%, -42%),
• by 0.7% to $265.8/t - for hard spring HRS-wheat in Minneapolis (-7.7%, -28.6%),
• by 1% to €233.25/t or $245.6/t - for wheat on the Paris Euronext (+0.5%, -42.5%).

Further deterioration of the global balance and unfavorable weather conditions for the development of winter crops in Ukraine and the Russian Federation will increase the pressure on stock market quotations.