New figures are no surprise to wheat market

Photo: Canva
Photo: Canva

The new report from the United States Department of Agriculture (USDA) has few surprises for the global wheat trade. Therefore, the markets reacted and prices thus remain fairly stable.

Compared to August, the production forecast for the worldwide wheat harvest has increased by more than 4 million tons to almost 784 million tons. This is mainly due to the higher harvest expectations in Russia. The grain trade previously thought that the Russian harvest had been estimated too low. A record harvest of 91 million tons of wheat is more in line with expectations.

The increase in the harvest estimate will bring global wheat production above last year’s level, bringing a new record crop to the country. Expectations regarding the consumption of wheat have also been raised somewhat, so that the effect on stocks at the end of the season remains limited.

Lower closing stock of wheat

USDA’s forecasters now expect the closing inventory to drop to 268.6 million tons by the end of June next year. This stock is only slightly larger than in the 2018-2019 season. In June 2020, inventories were highest at almost 297 million tons. Since then, there has been a downward trend, because consumption has exceeded production in recent years.

Wheat figures in the European Union have hardly changed since August. USDA maintains production forecast in the EU at 132.1 million tons. The sale of wheat for animal feed has increased by 1 million tons to 44 million tons. As a result, the wheat stock in the EU will drop to about 9.5 million tons by the end of June 2023.