The USDA increased the wheat production forecast for the EU and Ukraine, but did not change it for Australia and the Russian Federation

In the January report, USDA experts increased the forecasts of wheat production and stocks, but did not change the harvest estimates for Australia and the Russian Federation in accordance with the forecasts of local agencies, so the balance turned out to be less "bearish" than analysts expected. Estimates of world production and stocks are likely to be significantly increased in the February balance sheet.

In comparison with the December estimates, the new wheat balance for 2022/23 MR underwent the following changes:

• The global production forecast was increased by 0.72 million tons to 781.31 million tons (779.3 million tons in 2021/22 MR and 775.72 million tons in 2020/21 MR), in particular for Ukraine - by 0.5 million tons to 21 (33) million tons and for the EU - by 0.4 to 134.7 (138.22) million tons, while for China the estimate was reduced by 0.28 million tons to 137.72 (136.95) million tons. For the Russian Federation, the forecast was left at the level of 91 million tons, although the SovEcon agency increased the estimate to 101.2 million tons. For Australia, the forecast was left at the level of 36.6 million tons, while local analysts, against the background of high yields, estimate it at record levels 42 million tons
• The estimate of world consumption was increased by 0.2 million tons to 789.7 million tons (793.4 million tons in 2021/22 MR and 782.22 million tons in 2020/21 MR), in particular for the USA - by 0.9 million tons up to 30.65 (29.61) million tons due to active use for fodder and seeds.
• The global export forecast was increased by 0.77 million tons to 211.62 million tons (202.8 million tons in 2021/22 MR), in particular for Ukraine - by 0.5 million tons to 13 (15.3) million tons, EU - by 0.5 million tons to 36.5 (31.9) million tons, although for India the estimate was reduced by 0.35 million tons to 5.9 (8) million tons, and for Argentina, the Russian Federation and Australia it was left unchanged.
• The estimate of world imports was increased by 0.75 million tons to 205.05 million tons (198.3 million tons in 2021/22 FY and 195.3 million tons in 2020/21 FY), in particular for the EU - by 1 million tons to 8 (4.6) million tons as a result of active deliveries from Ukraine through the western borders.
• The forecast for global ending stocks has been raised by 1.1 mn t to 268.4 mn t (276.27 mn t in FY 2021/22 and 291.6 mn t in FY 2020/21), as inventory reductions in Iran and Saudi Arabia will more than compensated by their increase in the EU, Ukraine, Kazakhstan and India.

The markets reacted differently to the data of the report: prices in the EU continued to fall, and in the USA they rose. They were supported by data on quarterly wheat stocks in the US, which were 7% less than last year. While the USDA's surprise increase in the U.S. winter wheat planted area estimate to 36.95 million acres compared to last year's 34 million acres and analysts' forecast of 34.5 million acres had no effect on prices. During the month, wheat on the US exchanges is traded at almost the same level, while European and Black Sea futures continue to fall in price.

According to the data of the report, quotations increased:

• by 0.4% or $1.1/t to $272.9/t - March futures for soft winter SRW wheat in Chicago (+1.1% for the month),
• by 1.5% or $4.68/t to $306.8/t - March HRW hard winter wheat futures in Kansas City (+0.2%).
• by 1.4% or $4.77/t to $335.2/t - March futures for HRS durum wheat in Minneapolis (+1.2%),
• by 0.2% or $0.5/t to $307.75/t - February Black Sea wheat futures in Chicago (-2.4%).

At the same time, March wheat futures on Paris Euronext fell by 0.6% or €1.75/t to €291.25/t or $315.8/t (-3.9%).