The October WASDE report indicates a tightening of global wheat supplies, primarily due to production declines in major wheat producing countries. USDA lowered its global wheat supply forecast for the 2023/2024 season by 3.5 million tons from the previous month to 1 billion 51 million tons. Global ending stocks of wheat are estimated at 258 million tons, the lowest level in eight years.
The latest World Agricultural Supply and Demand Estimates (WASDE) report from the United States Department of Agriculture (USDA) paints a challenging outlook for the global wheat market in the 2023/24 season. The report highlights reduced supply, lower consumption, reduced trade, and declining stocks as key factors affecting the market.
Global wheat supplies have decreased by 3.5 million tons to 1,051 million tons, a downward revision from previous estimates. This decrease is primarily due to lower production in Australia, Kazakhstan, and Ethiopia, partially offset by higher production in the United States. Australia is estimated to be significantly impacted by prolonged dry conditions in most of its producing regions. This has led to an estimated 1.5 million ton reduction in wheat production, bringing the estimate to 24.5 million tons. Kazakhstan's production is also expected to decline by 2 million tons to 13 million tons due to suboptimal growing conditions. Ethiopia's wheat production is reduced by 2 million tons to 5.5 million tons as a result of reduced harvested area, dry conditions, and lower input use.
World wheat consumption estimates are also reduced by 3 million tons, primarily due to lower feed and residual use in Russia and Kazakhstan. Ethiopia and Nigeria contribute to the decline with reductions in food, seed, and industrial use.
The report also shows a decline in world trade, with a decrease of 1.1 million tons to an estimated 206.3 million tons. This decrease is largely due to lower exports from Australia, Brazil, and Kazakhstan. Higher Russian exports partially offset this decline.
The most significant note from the report is the reduction in projected global ending stocks for the 2023/24 season. Global ending stocks are now estimated at 258.1 million tons, the lowest level since 2015/16. These projections suggest a potentially tighter global wheat market, which could have implications for wheat prices and supply stability.