20220516-USDA-USDA_Wheat_Outlook_2022.5.16_18页_696kb

Wheat Outlook Summary: May 2022

Core Content

This report provides an overview of the U.S. and global wheat markets for the 2022/23 marketing year. It outlines production forecasts, export and import trends, price projections, and consumption patterns, emphasizing the impact of drought, geopolitical tensions, and market dynamics.

U.S. Wheat Outlook

Key Projections

• U.S. Season-Average Farm Price (SAFP): Projected to reach a record $10.75 per bushel for 2022/23, up $3.05 from the revised 2021/22 SAFP of $7.70.
• Production: Estimated at 1.729 billion bushels, up 5% from 2021/22, but still the second lowest in the last 20 years due to pervasive drought in key winter wheat areas.
• Exports: Projected at 775 million bushels for 2022/23, the lowest since 1971/72, due to tight supplies and reduced competitiveness.
• Ending Stocks: Forecasted to be 619 million bushels, the lowest since 2013/14, with an ending stocks-to-use ratio of 32.8%.
• Imports: Expected to increase by 25 million bushels to 120 million, returning to a relatively normal level after smaller imports in 2021/22 due to Canada's tight supplies.

By-Class Production

• Hard Red Winter (HRW): Production is forecast at 590 million bushels, down 21% from the previous year, primarily due to drought and higher abandonment in Texas, Oklahoma, and Kansas.
• Soft Red Winter (SRW): Projected at 354 million bushels, down 2% from the previous year but still the second largest since 2015/16.
• White Winter: Up 38% to 230 million bushels, driven by improved conditions in the Pacific Northwest.
• Durum and Other Spring Wheat: Projected at 555 million bushels, up 51% from the previous year, with strong yields in Arizona and California.

Global Wheat Outlook

Production

• Global Production: Projected at 774.8 million metric tons, down 17% from the 2021/22 record due to drought in Australia and Ukraine, and expected lower winter wheat harvests in Ukraine.
• Top Producers:
  • Russia: Expected to rebound with 58.5 million MT winter wheat production, up 12% from last year.
  • Canada: Projected at 33.0 million MT, up 0.7 million MT from 2021/22 due to improved conditions in the Prairies.
  • Australia: Projected at 25.0 million MT, down 2.0 million MT from 2021/22.
  • Ukraine: Expected to produce 5.9 million MT, down 1.6 million hectares from 2021/22 due to conflict.
  • Morocco: Production forecast down 5.3 million tons to 2.3 million tons, dropping it from the top 20 producers.

Consumption

• Global Consumption: Projected at 783.9 million MT, down 3.5 million MT from 2021/22.
• FSI Use: Expected to reach a record level, driven by rising incomes and urbanization, with the largest increases in China and the EU.
• Feed and Residual Use: Projected down 7.5 million MT to 153.5 million MT due to elevated wheat prices compared to feed grains.

Trade

• Global Trade: Projected to increase to 205.3 million MT in 2022/23, up 3.7 million MT from 2021/22, with Russia and the EU as the top exporters.
• Top Importers:
  • Indonesia: Projected to be the top importer at 11.2 million MT.
  • Egypt: Projected down 1.0 million MT due to increased domestic procurement.
  • Turkey: Expected to see higher imports and exports of wheat products.
  • Iran: Imports projected down 24% as domestic production is expected to rise.

Key Market Dynamics

• Price Trends: High SAFP is supported by tight domestic stocks, elevated cash and futures prices, and global market uncertainty.
• Commodity Pricing: Strong pricing for other commodities and high agricultural input costs further support the high wheat prices.
• Consumer Prices: Wheat-based food prices are rising due to inflation, with the CPI showing significant increases for the Food and Cereal and Cereal Products categories.
• Supply and Use: Despite reduced production, global consumption is expected to exceed supply, leading to a drawdown in ending stocks, projected at 54.5 million MT for major exporters, the lowest since 2012/13.
• U.S. Food Use: Raised to 962 million bushels in 2021/22 due to stronger-than-expected milling demand, and expected to increase further in 2022/23.

Summary of Major Changes

• Domestic Supply and Use:
  • Production up 5%, but still below the 5-year average.
  • Exports down 3.7 million MT to 775 million MT.
  • Ending stocks to be the lowest since 2013/14.
• Global Supply and Use:
  • Production down 4.5 million MT from 2021/22.
  • Consumption down 3.5 million MT from 2021/22.
  • Ending stocks down 5% from 2021/22, with the lowest since 2016/17.

Conclusion

The 2022/23 wheat outlook is characterized by tight supplies, high prices, and geopolitical challenges, particularly in Ukraine and Russia. These factors are expected to drive record U.S. farm prices, reduced global production, and lower global ending stocks, while consumption remains strong, especially in China and the EU. The report highlights the impact of drought, conflict, and market dynamics on both U.S. and global wheat markets.