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Global wheat supply is set to tighten

08 June 20223 min reading

The US Department of Agriculture issued its first world estimates for the 2022/23 crop season on 12th May. According to USDA’s Grain: World Markets and Trade report, global wheat production is likely to decline for the first time in four years. Global ending stocks are expected to fall from 279.7 million tons in 2021/22 to 267 million tons in 2022/23.

The USDA forecast 2022/23 total global wheat output at 775 million tons, the first decline since the 2018/19 season and down 4 million tons from the previous year. Reduced production in Ukraine, Australia, and Morocco is only partly offset by increases in Canada, Russia, and the United States.

The largest cut to production is in Ukraine, which is projected to have a crop one-third smaller than the prior year with the reduced harvested area and lower yields due to the ongoing war with Russia. Production in Ukraine is forecast at 21.5 million tons, 11.5 million tons lower than 2021/22. And production in Russia is estimated at 80 million tons, up slightly from 75.2 million tons this season.

Australia is expected to have a smaller crop, down from last year’s record, on reduced harvested area and yields. Production in Morocco is forecast at the lowest since 2007/08 because of severe drought conditions. The crop in India is down as heatwaves have damaged yields in prominent northern growing states. European Union production is forecast modestly lower from the previous year at 136.5 million tons. China, the second-largest global producer, is also expecting a slightly smaller harvest (135 mt).

According to the report, the largest year-over-year growth in production is expected in Canada, where area and yield are both forecast higher on improved weather following last year’s widespread drought. Turkey’s crop is forecast higher on improved weather boosting yields, offsetting a reduction in harvested area. Kazakhstan is also expecting a larger crop on higher yields. The United States is forecast to have a larger crop on recovery in spring wheat production after a drought-plagued 2021/22.

RECORD GLOBAL WHEAT TRADE

Global wheat consumption is projected at 788 million tons, down 3 million from last year. And projected 2022/23 global trade is a record 205 million tons, up 5.0 million from last year. Imports are projected to rise on increased exportable supplies from Russia and Canada more than offsetting reductions for Ukraine and Australia. Russia is projected as the leading 2022/23 wheat exporter at 39 million tons, followed by the European Union, Australia, Canada, and the United States. Ukraine’s 2022/23 export forecast is 10 million tons, down sharply from last year on reduced production and significant logistical constraints for exports. India is expected to remain a significant wheat exporter in 2022/23. Canada is projected to have the largest increase in exports year over year, as a much larger crop and strong global demand for durum wheat spur strong growth. 

Projected 2022/23 world ending stocks are reduced 5 percent to 267 million tons and would be the lowest level in six years. The largest change is for India, where stocks are forecast to decline to 16.4 million tons, a five-year low.



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