In the new calculations for the global wheat balance for the 2022-2023 season, the USDA’s USDA assumes slightly higher theoretical closing stocks.
This adjustment came as a result of lower harvest expectations, but this was also offset by lower rates of wheat consumption around the world. This is what the World Agricultural Supply and Demand (Wasde) report released in July showed. The theoretical closing stock has been adjusted from 266.8 million to 267.5 million tons. The initial stockpile of wheat on July 1, 2022 amounted to 280.1 million tons.
The USDA assumes reduced wheat production in the European Union, Ukraine and Argentina. The adjustment for the EU from 136.1 million tons to 134.1 million tons depends on dry growing conditions in Spain, Italy and Germany, among other countries. The crop in Ukraine is estimated at 2 million tons, less than 19.5 million tons. This is because the area to finally be harvested turned out to be smaller than what the Ukrainian authorities had previously reported.
Bigger harvest in Canada and the United States
This lower production outlook was partially offset by upwardly revised revenue numbers in Canada, the United States and Russia. The USDA now calculates more wheat acreage and better hectare production for both Canada and the United States. Russia appears to be heading towards harvesting 81.5 million tons of wheat, which is more than 5 million tons more than in 2021.
Due to lower yields, the USDA now estimates that export volumes to the EU and Argentina will also be somewhat lower. On the other hand, there are more exports from Canada and the United States. Total global wheat consumption decreased by 1.8 million tons, according to the new forecasts of the US Department of Agriculture. The main reason for this decline is the decline in the use of wheat in animal feed worldwide.
With global production of 771.6 million tons and consumption of 784.2 million tons of wheat, the theoretical closing stock on July 1, 2023 will be 267.5 million tons. That’s 0.7 million tons more than the June and WASD report forecast, but still the lowest level since the 2016-17 season, according to the USDA.
