Global Wheat Export: Russia to Head the Top 5
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Global Wheat production in 2022/23 is lowered by 2.1 million metric tons (MMT) to 780.6 MMT as Argentine production is reduced further by the ongoing drought conditions. 3.0 MMT cuts production for Argentina to 12.5, the lowest since 2015/16, and yields are forecasted at 2.34 metric tons/hectares, the lowest since 2008/09. Area harvested is also lowered (-0.5 million hectares to 5.4 million hectares) based on expectations of higher abandonment.
Statistics Canada released updated production results on December 2. They were lower than trade sources anticipated, especially for Durum Wheat, resulting in a decline in Canada’s production (-1.2 MMT to 33.8 MMT). Despite the decline, this is still Canada’s third-largest Wheat crop. Partially offsetting these reductions is an increase for the Australian crop by 2.1 MMT to a record 36.6 MMT, based on the latest Australian Bureau of Agricultural and Resource Economics and Sciences forecast. If realized, Australia will have back-to-back record crops.
Russia gained competitiveness in the global market by being able to supply low-cost Wheat to price-sensitive markets in the Middle East and North Africa. Production in Russia is forecast at a record 91.0 MMT as winter Wheat harvest results exceed expectations. Winter Wheat is forecast at a record 68.0 MMT, while spring Wheat is at a near-record 23.0 MMT. While the ongoing war has impacted 2022/23 production for Ukraine, Wheat production is revised up 1.0 MMT to 20.5 MMT based on recent harvest results, but still down 38 percent from its record production in 2021/22.
MY 2022/23 global consumption is lowered by 2.1 MMT to 783.0 MMT with a 1.5 MMT cut for feed and residual use (154.9 MMT) and a 0.6 MMT decline for food, seed, and industrial use (628.1 MMT). Ukraine’s feed and residual use are lowered 1.0 MMT to 4.5 MMT. The European Union is lowered 1.0 MMT to 44.5 MMT as Wheat is less competitive in the feed ration compared to barley or corn, and inflationary pressures deter consumers from consuming meat and dairy products. Tighter domestic production for Canada lowers feed and residual use by 0.5 MMT to 3.5 MMT.
Iran is also lowered 0.5 MMT to 2.0 MMT as high prices have deterred imports resulting in lower feed and residual use. Imports for South Korea, Philippines, Indonesia, Vietnam, and Thailand are revised higher as feed-quality Wheat for East Asian countries is currently price competitive due to tight global corn supplies and ample amounts of feed-quality Wheat from Australia.
Food, seed, and industrial (FSI) use is lowered for Algeria (-0.2 MMT to 11.3), Cuba (-0.2 MMT to 0.6 MMT), and Nigeria (-0.2 MMT to 5.7 MMT) and is partially offset with an increase for Saudi Arabia (+0.3 MMT to 4.0 MMT).
Global Wheat Stocks and Exports
2022/23 global ending stocks are projected to be down 0.5 MMT to 267.3 MMT, with downward revisions for the major exporters (-1.1 MMT to 54.5 MMT) only partially offset by increases for Pakistan (+0.3 MMT to 4.4 MMT), India (+0.3 MMT to 12.3 MMT), and Saudi Arabia (+0.2 MMT to 3.2 MMT). Russia and Ukraine’s stocks are tightened because of more export opportunities for both countries. Russia is down 1.0 MMT to 14.4 MMT, but still the highest since 2009/10. Ukraine is revised down 0.5 MMT to 4.2 MMT.
Russia is to lead the top 5 Wheat exporters in MY 2022/2023, approximately with a 20% global share, followed by the European Union (16%), Australia (12.5%), Canada (12.5%), and the United States (11%). According to AgFlow data, the US shipped 0.3 million tons of Wheat to Japan in December 2022, followed by Mexico (0.2 million tons), South Korea (0.16 million tons), and the Philippines (0.11 million tons). The Russia-Ukraine war caused the prices of these significant exporters to be very volatile. Russia and the EU remain some of the lower-priced options on the market.
Other sources: USDA
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