A Closer Look at the WASDE Report

USDA forecasts show that Ukraine’s exports will drop from 19 mmt in 2021-22 to 10 mmt in 2022-23. The USDA forecast also shows that India will increase its exports in 2022-23 from 8.15 mmt to 8.5 mmt. This is despite ongoing concerns that a heat wave has robbed the country of production potential, prompting some analysts to call for a return to imports in 2022-23.

As shown by the bars on the attached chart, world wheat ending stocks are forecast to decline by 12.7 mmt in 2022-23 to 267 mmt (green bar). This is a third consecutive drop in stocks and represents a bigger drop than expected, with the average of the pre-report estimates pointing to global stocks of 271.6 mmt. If it materializes, it would be the biggest year-over-year decline in global stocks seen in 10 years.

According to data from the USDA’s FAS, stocks in the hands of the eight largest exporters are expected to fall for the fifth consecutive year to 54.494 mmt. As global demand remains robust, the share of global stocks held by the eight largest exporters is expected to fall to 20.4% of the global total at the end of the 2022-23 crop year, after holding nearly 50% of stocks. world lately. as 2005-06. This is illustrated by the brown line on the attached chart, which shows this declining percentage in conjunction with global equities, supporting prices.

The black line shows how China’s share of global stocks continues to rise, estimated at 53% in the current data. Although there is skepticism about the existence and quality of these stocks, one thing is certain and that is that they are not accessible to meet global demand.

The USDA forecast for Canada indicates 33 mmt of production and 24 mmt of exports for 2022-2023, which is higher than the current Government of Canada estimates, which will be updated in May to incorporate the latest data on seeding intentions. Despite the expected increase in production, stocks are expected to increase by a modest 500,000 tonnes, to 3.42 million tonnes, or 10.3% of the expected disappearance. This is 1.3 mmt less than Agriculture and Agri-Food Canada’s current carryover forecast, signaling favorable demand prospects expected going forward.

Cliff Jamieson can be reached at [email protected]

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