USDA sharply lowered forecasts for global wheat imports and consumption, putting pressure on quotes

In the April supply and demand report, USDA experts sharply reduced forecasts for world wheat imports and consumption in the 2024/25 MY, as a result of which the estimate of ending stocks exceeded analysts' expectations. Against this background, and given the further significant reduction in the import forecast for China, stock quotes fell by 0.8-1.8% yesterday, losing 2.2-3.4% for the month.

Compared to March estimates , the world wheat balance for the 2024/25 MY has undergone the following changes:

• The estimate of initial reserves has been reduced by 0.44 million tons to 269.06 million tons (274.27 million tons in 2023/24 MY) due to reduced reserves for Uzbekistan and Israel.
• The global production forecast is reduced by 0.4 million tons to 796.85 million tons (791.24 million tons in 2023/24 MY and 789 million tons in 2022/23 MY) due to adjustments to production estimates for Saudi Arabia and the EU (-0.3 million tons).
• The forecast for world consumption has been reduced by 1.45 million tons to 805.2 million tons (797.83 million tons in 2023/24 MY), in particular for India - by 2 million tons to 110.24 (112.34) million tons, China - by 1 million tons to 150 (153.5) million tons and Ukraine - by 0.3 million tons to 6.7 (6.7) million tons. Forecasts for North African countries have also been reduced by 0.4 million tons, Southeast Asian countries - by 0.3 million tons and Middle Eastern countries - by 0.3 million tons.
• The estimate of world exports was reduced by 1.25 million tons to 206.82 million tons (221.22 million tons in 2023/24 MY), in particular for the Russian Federation - by 1 million tons to 44 (55.5) million tons, the EU - by 0.5 million tons to 26.5 (38) million tons, Australia - by 0.5 million tons to 25.5 (19.84) million tons, the USA - by 0.4 million tons to 22.3 (19.24) million tons, while the estimate for Canada was increased by 0.5 million tons to 26.5 (25.44) million tons, and Ukraine - by 0.5 million tons to 16 (18.6) million tons.
• The estimate of world imports has been reduced by 3.86 million tons to 198.84 million tons (221.83 million tons in 2023/24 MY), in particular for China - by 3 million tons to 3.5 (13.28) million tons and for Southeast Asian countries - by 0.7 million tons to 30.08 (30.6) million tons.
• The forecast for world ending stocks has been increased by 0.6 million tons to 260.7 million tons (269.5 million tons in 2023/24 MY), which will be the lowest level since 2015/16 MY, although analysts estimated them at 260.4 million tons. Estimates have been increased for India by 2 million tons, the Russian Federation by 1 million tons, the EU by 0.7 million tons and Australia by 0.5 million tons, but reduced for China by 2 million tons and for importing countries in general by 2.86 million tons, while stocks in exporting countries will grow by 1.44 million tons. This indicates a trend of decreasing global demand in anticipation of a good harvest in importing countries.

On the basis of the report, May wheat futures fell:

• by 0.8% to $197.7/t – for soft winter SRW wheat in Chicago (-3.4% compared to data after the March report),
• by 1.8% to $205/t – for hard winter HRW wheat in Kansas City (-2.5%),
• by 1.1% to $221.2/t – for durum spring HRS wheat in Minneapolis (+0.8%),
• by 1.5% to €216.5/t or $245/t – for wheat on the Euronext exchange in Paris (-2.2%).

The increasing risk of a global crisis due to the trade conflict between the US and China increases expectations of a decline in global demand amid a decline in household incomes, and forecasts of a better harvest than last year are holding back purchases of old crops, so prices are not expected to rise in the coming months.

The European Commission has increased its estimate of wheat production in the EU in 2025 by 0.6 million tons to 128.1 million tons, which, against the backdrop of low export rates and growing stocks of the old crop, compensates for a possible slight decrease in the harvest in Ukraine and the Russian Federation.