USDA again raises forecasts for world wheat production, consumption, exports and stocks in FY 2023/24

In the January report, as in the December report, USDA experts again raised their forecasts for world wheat production, consumption, exports and stocks. But quotations almost did not react to this, as they already fell by 5-6% during the month.

An increase in harvest and export forecasts for Ukraine and the Russian Federation, which sell the cheapest wheat on the world market, will increase pressure on prices.

In comparison with the December estimates, the January wheat balance for 2023/24 MR underwent the following changes:

• The estimate of initial reserves was increased by 1.71 million t to 271.56 million t (272.4 million t in FY 2022/23) as a result of the balance sheet adjustment for FY 2022/23.
• The global production forecast was increased by 1.9 million tons to 784.91 million tons (789.17 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 the Russian Federation by 1 to 91 (92) million tons, Ukraine – by 0.9 to 23.4 (21.5) million tons, while for China the estimate was reduced by 0.4 to 136.6 (137.72 ) million tons. For Brazil and Argentina, the forecasts were left unchanged.
• The estimate of world consumption was increased by 1.78 to 796.44 million tons (790.93 million tons in 2022/23 MR and 782.22 million tons in 2021/22 MR), in particular for the EU by 1 million tons and India by 1 .25 million tons. At the same time, for 2022/23 MR, the consumption forecast has been reduced by 1.19 million tons to 790.93 million tons, which will be 5.5 million tons less than the new season.
• The global export forecast was increased by 2.35 to 209.54 million tons (220.17 million tons in 2022/23 MR and 202.98 million tons in 2021/22 MR), in particular for Ukraine – by 1.5 to 14 (17 .12) million tons, the Russian Federation - by 1 to 51 (47.5) million tons, Canada - by 0.5 to 24 (25.6) million tons, Australia - by 0.5 to 19 (31.82) million t, while for the EU the forecast was reduced by 1 to 36.5 million t.
• The forecast of world imports was increased by 2.43 to 209.15 (211.74 and 199.37) million tons, in particular for the EU - by 2.5 to 11 (12.1) million tons thanks to active deliveries from Ukraine.
• The estimate of world final stocks was increased by 1.83 to 260.03 (271.56) million tons, although analysts estimated them at 258.09 million tons. It is expected that the increase in stocks in the EU by 2.5 million tons and in Ukraine by 1 .8 million tons partially compensates for their reduction in Australia and Canada by 0.5 million tons each.

According to the report, March wheat futures fell:

• by 1.3% to $219/t - for soft winter SRW-wheat in Chicago (-6% compared to data after the release of the December report),
• by 0.1% to $226.1/t - for HRW hard winter wheat in Kansas City (-7.4%).
• by 0.1% to $257/t - for hard spring HRS-wheat in Minneapolis (-4.3%),
• by 1% to €216/t or $240.5/t - for wheat on the Paris Euronext (-6.6%).

The quote supported a surprise decline in the U.S. winter wheat acreage forecast, which NASS estimated at 34.425 million acres, compared with 36.699 million acres last year and 35.7 million acres forecast by analysts.