The USDA increased the forecast of world wheat production to a record 784 million tons, including estimates for Ukraine and the Russian Federation

In the September supply and demand balance sheet for 2022/23 MY, USDA experts again sharply raised the forecast for world wheat production and consumption, which will lead to a slight increase in ending stocks.

Compared with the August estimates, the September wheat balance for the 2022/23 MR underwent the following changes:

• The estimate of initial reserves was reduced by 0.68 mln t to 275.67 mln t (290.27 in 2021/22 MR and 297.92 mln t in 2020/21 MR), as the consumption forecast in 2021/22 MR was increased by another 1 .62 million tons to a record 794.78 million tons.
• The global production forecast was raised by 4.32 million tons (+12.28 million tons in two months) to a record 783.92 million tons (779.9 million tons in 2021/22 FY and 775.72 million tons in 2020/21 FY ), in particular for Ukraine by 1 million tons to 20.5 (33.1) million tons and Russia by 3 million tons to 91 million tons compared to 75.16 million tons last year. For the US and other countries, the estimates were left unchanged. The forecast for the Russian Federation is significantly lower than the estimates of local analysts of 95-97 million tons, so it may be adjusted in October.
• The estimate of world consumption was increased by 2.42 million tons (+6.8 million tons in two months) to 791.02 million tons (794.78 million tons in 2021/22 MR and 782.22 million tons in 2020/21 MR) , because against the background of a decrease in the corn harvest, the consumption of wheat feed will increase by 1 million tons in the EU, by 1 million tons in the Russian Federation, and by 0.5 million tons in Ukraine.
• The global export forecast was increased by 0.24 million tons to 208.89 million tons (203.17 million tons in FY 2021/22). Despite the increase in production, the Russian Federation will not be able to increase exports due to sanctions.
• The estimate of world imports was increased by 0.25 million tons to 204.14 million tons (197.99 million tons in 2021/22 FY and 195.3 million tons in 2020/21 FY).
• The forecast of world ending stocks , against the background of a reduction in initial stocks and an increase in production and consumption, has been increased by 1.23 million tons to 268.57 million tons (275.67 million tons in FY 2021/22 and 291.6 million tons in FY 2020/21) .

Wheat quotes reacted modestly to the bearish report and fell by 1-1.5%, although they have risen sharply over the past three sessions, in particular:

• by 1.3% or $3.95/t to $315.5/t - December futures for soft winter SRW wheat in Chicago (+6.5% for the month),
• by 0.2% or $0.82/t to $340.6/t - December HRW hard winter wheat futures in Kansas City (+4.3%).
• by 0.1% or $0.37/t to $340.4/t - December futures for HRS durum wheat in Minneapolis (+0.1%).
• by 0.1% or $0.5/t to $315/t - October Black Sea wheat futures in Chicago (-12.5%).
• by 0.6% or €2.25/t to €335.5/t or $340.67/t - December wheat futures on Paris Euronext (+2.1%).

Black Sea wheat continues to fall in price against the background of a record harvest in the Russian Federation and difficulties with deliveries from Black Sea ports due to military actions in Ukraine, so the work of grain corridors will have a significant impact on quotations in the near future.