US, World Wheat Stocks Heavier from October

US and world wheat ending stocks for 2023-24 both got heavier in the USDA’s latest monthly supply-demand update. 

Released Thursday, the report pegged US wheat ending stocks for the current marketing year at 684 million, up 14 million bu from last month – and well above 582 million last year - on a higher import forecast and a small reduction in expected domestic use. Meanwhile, world wheat ending stocks were raised about 600,000 tonnes from October to 258.7 million, as an upward revision in beginning stocks was more than enough to offset a decline in production. World wheat ending stocks in 2022-23 amounted to 269.55 million tonnes. 

Both the US and world wheat ending stocks estimates topped average pre-report trade guesses of 669 million bu and 257.8 million tonnes, respectively. Wheat futures were trading about a dime lower this afternoon, following the report’s release. 

For the US, expected wheat imports increased 10 million bu from October to 145 million, well above 122 million and 96 million bu the previous two years. The upward revision reflects the strong pace of imports to date, and expectations for the remainder of the marketing year, the USDA said. 

Projected domestic use was trimmed 4 million bu from last month to 1.155 billion bu, all on a reduction in expected food use. According to the latest government Flour Milling Products report, July-September wheat used in milling was the smallest for this quarter since at least 2014, the USDA said. 

On a global basis, the USDA lowered expected 2023-24 production by 1.5 million tonnes from last month to 782 million on decreases to many countries including India, Argentina, Kazakhstan, the UK, and Brazil. The decrease for production in India (down about 3 million tonnes to 110.5 million) is based on revised government estimates. In Argentina, production is now forecast 1.5 million tonnes lower to 15 million, versus 12.55 million last year, as rains in October were too late to benefit the crop in Cordoba and Santa Fe. With the drop in output, Argentine exports were lowered 1.5 million tonnes to 10 million. 

Production for Kazakhstan, a significant world exporter, was reduced 1 million tonnes to 12 million, although expected shipments were unchanged at 10 million. 

The production cuts were partially offset by a 5-million increase in the forecast for Russia, up to 90 million, based on near-final harvest data from the Ministry of Agriculture that indicates more harvested area and higher yields. Despite the increase, the Russian export forecast was left steady from last month at 50 million tonnes. 

Ukraine production was left steady from October at 22.5 million tonnes, with the country’s exports revised up 1 million tonnes to 12 million. 

At $7.20/bu, the 2023-24 US estimated season average wheat price was reduced a dime from October and remains well down from $8.83 in 2022-23.