20220114-USDA-USDA_Wheat_Outlook_2022.1.14_8页_368kb

Wheat Outlook Summary: January 2022

Core Content Overview

This report provides an analysis of the U.S. and global wheat market outlook for the 2021/22 marketing year, including production, trade, and consumption trends. It also highlights the implications of these changes on domestic and international supply and demand dynamics.

U.S. Winter Wheat Plantings

• Planting Area: The 2022/23 U.S. winter wheat planting area reached 34.4 million acres, marking a 2% increase from the previous year and the largest since 2016/17.
• Incentive for Planting: Strong fall wheat prices provided a strong incentive for planting.
• Drought Impact: Despite the increase in planting, 69% of the winter wheat area is facing drought conditions, which could affect yields.
• Historical Context: Winter wheat plantings have increased for the second consecutive year after reaching a 111-year low in 2020/21.

Domestic Wheat Outlook

Export Projections

• All-Wheat Exports: Reduced by 15 million bushels to 825 million, due to slow export sales and shipments.
• HRW Exports: Reduced by 15 million bushels to 335 million, as international competitiveness is limited by premium prices.
• HRS and Durum Exports: Unchanged this month, but projected imports are reduced by 5 million bushels each to 45 million and 40 million, respectively.

Import Projections

• All-Wheat Imports: Reduced by 10 million bushels to 100 million, based on the pace of trade.
• HRS Imports: 21 million bushels during June-November, representing 48% of the revised marketing year forecast, down from 60% in the previous year.
• Durum Imports: 20 million bushels during the same period, representing 50% of the revised forecast.

Farm Price and Use

• Season-Average Farm Price: Increased by $0.10 to $7.15 per bushel, driven by strong farmgate prices and continued strong cash prices.
• Feed and Residual Use: Reduced by 25 million bushels to 110 million, due to higher stocks and uncompetitive wheat prices in feed rations.
• Seed Use: Unchanged overall, but HRW and HRS seed use decreased slightly, while SRW and Durum increased.

U.S. Wheat Supply and Use

Global Wheat Outlook

Production

• Global Production: Increased by 0.7 million MT to 778.6 million MT for the 2021/22 marketing year.
• Key Changes:
  • Argentina: Production rose to 20.5 million MT, a record due to improved crop conditions.
  • European Union: Production increased by 0.2 million MT, mainly due to higher area in France.
  • Brazil: Production decreased by 0.1 million MT to 7.8 million MT due to extreme seasonal dryness.
  • Paraguay: Production decreased by 0.1 million MT to 1.1 million MT due to yield limitations.

Consumption

• Global Consumption: Revised down by 1.9 million MT to 787.5 million MT.
• Key Factors:
  • Food, Seed, and Industrial Use: Revised down by 171,000 MT to 626.1 million MT.
  • Feed and Residual Use: Revised down by 1.0 million MT to 159.6 million MT, with EU and U.S. both seeing reductions.

Trade

• Global Trade: Slightly lower month-to-month, with exports revised down by 160,000 MT to 206.7 million MT.
• Key Trade Adjustments:
  • Argentina: Exports increased by 1.0 million MT to 14.0 million MT due to higher production.
  • Russia: Exports decreased by 1.0 million MT to 35.0 million MT due to export quotas and taxes.
  • EU: Exports increased by 500,000 MT to 37.5 million MT, benefiting from lower competition from Russia.
  • U.S.: Exports decreased by 500,000 MT to 23.0 million MT, reflecting slow sales and shipments.
  • Kazakhstan: Exports increased by 200,000 MT to 7.2 million MT, due to increased imports from Russia.
  • Algeria: Exports increased by 200,000 MT to 10,000 MT, due to robust tenders.
• Global Imports: Revised down by 530,000 MT to 202.4 million MT, with Pakistan, Mongolia, and South Africa seeing revisions due to slow import pace.

Global Ending Stocks

• Global Ending Stocks: Revised up by 1.8 million MT to 279.9 million MT, as global trade decreased.
• Major Exporters' Stocks:
  • EU: Increased by 2.1 million MT to 52.8 million MT.
  • Argentina: Increased by 369,000 MT to 2.7 million MT.
  • Russia: Increased by 400,000 MT to 10.6 million MT.
  • Kazakhstan: Increased by 400,000 MT to 1.2 million MT.
• Other Regions:
  • Pakistan: Revised down by 200,000 MT to 4.4 million MT.
  • South Africa: Revised down by 156,000 MT to 0.6 million MT.
  • Brazil: Revised down by 100,000 MT to 0.8 million MT.
• 2020/21 Ending Stocks: Revised down by 0.8 million MT to 288.8 million MT, with Russia, Argentina, and South Africa being the main contributors.

Key Implications

• U.S. Market: Tight supplies and high prices have supported wheat prices, but export performance remains weak due to uncompetitive pricing and slow sales.
• Global Market: Argentina leads in production increases, while Brazil and Paraguay face yield challenges. EU benefits from reduced Russian exports, and global ending stocks are tight, with major exporters accounting for 19% of total global stocks.

Suggested Citation

Sowell, Andrew R. and Bryn Swearingen. Wheat Outlook: January 2022, WHS-22a, U.S. Department of Agriculture, Economic Research Service, January 14, 2022.