The USDA again, as in the December report, raised its forecast for global inventory production and reduced wheat consumption

The US Department of Agriculture (USDA) in its January supply and demand report continued to hastily adjust the global balance in the direction of increasing production and reducing consumption, but production forecasts for Australia, Argentina and Russia are still lower than official data from local agencies, so in February we will see another correction.

An increase in the forecast of global wheat stocks increases pressure on prices, but as long as the level of stocks remains at the lowest level since 2016/17mg, prices will remain at a high level.

In the January report, the forecast for initial wheat stocks in my 2021/222 was lowered by 0.82 million tons to 288.82 million tons (295.99 million tons in my 2020/21 and 280.7 million tons in my 2019/20) due to a revision of production and consumption volumes in the 2020/21 season.

The forecast for global wheat production in 2021/22 MG was raised by 0.71 million tons to 778.6 million tons (775.9 million tons in 2020/21 mg and 763.5 million tons in 2019/20 MG), in particular for Argentina by 0.5 million tons to 20.5 million tons (17.65 million tons in 2020/21 MG), although local analysts show forecasts at the level of 21.8-22.1 million tons and the EU – by 0.2 million tons to 138.9 million tons (126.01 million tons in my 2020/21).

The forecast for Australia is left at 34 million tons (33.3 million tons in my 2020/21), although the local agency predicts 35.5 million tons.

The forecast for global wheat consumption in my 2021/22 was lowered by 1.88 million tons to 787.47 million tons (782.25 million tons in my 2020/21 and 748.33 million tons in my 2019/20) due to reduced feed wheat consumption in the US, EU and Ukraine due to higher wheat prices compared to corn and barley.

The forecast for world wheat exports is lowered by 1 million tons to 204.4 million tons due to a decrease in the estimate of exports from Russia by 1 million tons to 35 million tons due to the introduction of quotas and the United States by 0.4 million tons to 22.45 million tons due to low export rates, while the forecast for exports from the EU is raised again - by 0.5 million tons to 37.5 million tons, although the export rates remain very low - only 15 million tons since the beginning of the season.

The forecast for wheat imports was lowered by 0.4 million tons to 202.46 million tons (194.18 million tons in my 2020/21).

The estimate of global final wheat stocks in the 2021/22 season was increased by 1.77 million tons to 279.95 million tons (288.82 million tons in 2020/21 mg and 299.22 million tons in 2019/20 MG), which is higher than the average analyst estimate of 278.7 million tons, but remains at a low level since the 2016/17 season.

Reserves have been increased for the main wheat exporters: the United States + 0.81 million tons, Russia + 0.4 million tons, Argentina + 0.3 million and Ukraine 0.2 million tons, which will also increase pressure on prices.

Also yesterday, the USDA raised its forecast for winter wheat sowing areas in the United States compared to the December estimate by 752 thousand acres to 34.4 million acres, which was higher than the average forecast of analysts of 34.255 million acres, which increases pressure on prices.

The report's data accelerated the fall in stock prices, and March futures declined:

• by 5.5 € / t to 271.25 € /t (EUR 310.4 / t) on Paris Euronext, (2 283 / t a month ago);
• by 4 4.59 / ton to 2 278.4 / ton for soft winter SRW wheat in Chicago, (м 290.9 / ton M. T.);
• by 3 3.5/ton to 3 327.5 / ton for Black Sea wheat in Chicago. (341.1 м / T M. T.).

Low export rates and increased precipitation on winter wheat crops in the United States and the Black Sea region will continue to put pressure on prices in the coming month, and only the first estimates of crops after the winter in March may put additional pressure on prices.