The United States Department of Agriculture (USDA) lowered global wheat production by 2.0 million mt to 792.4 million mt but still remains at a record. Projected 2021/22 global trade is raised 0.8 million tons to a record 204 million, on increased exports by the EU, Ukraine, and Australia offsetting reductions in Canada, Kazakhstan, and the United States. Projected 2021/22 world ending stocks are lowered 5.1 million tons to 291.7 million but remain above last year.

In the July World Agriculture Outlook Supply and Demand Estimates report, USDA lowered global wheat production by 2 million metric tons (MT) to 792.4 million MT. Production for the United States is lowered 4.1 million MT to 47.5 million with a smaller spring wheat and durum crop more than offsetting a larger winter wheat production. Wheat production outside the United States is increased by 2.1 million MT to 744.9 million MT, driven mainly by a larger crop for Australia, with other revisions largely offsetting. Australia’s production is projected 1.5 million MT higher at 28.5 million with stronger expected yields more than offsetting a reduction for area harvested. Yields are raised with favorable conditions during the key planting and early vegetative stages. Total wheat production in Russia is down by 1 million MT, with the reduction divided evenly among the spring and winter wheat crops. Winter wheat estimated production for Russia is reduced 500,000 MT to 64 million with lower area based on updated data from Russia’s Federal State Statistical Service. While the winter wheat yield is estimated higher because of good growing conditions, it is not enough to overcome the smaller area caused by winterkill. In late winter and early spring, winter crops in some areas of the Central and Volga regions experienced a process called ‘ice crusting’ where the snow melted, followed by the moisture in and around the plant refreezing from colder temperatures. Russia spring wheat production is revised downwards to 21 million MT as the decrease in spring wheat yield more than offsets an increase in area. Yields are down because of heat and dry conditions in the central spring wheat production areas. The increase in spring wheat area may partly reflect the impact of spring crops being resown to replace damaged winter crops.

Wheat production in Kazakhstan is estimated to be 13 million MT, a 1 million MT decrease from last month. From April 1 to July 7, Kazakhstan’s cumulative precipitation was more than 40 percent lower than the long-run average. Dryness in Kazakhstan’s key spring wheat growing areas also reflect conditions in key spring wheat-growing regions of Russia, particularly the Ural region.

Canada is still experiencing severe drought, extreme heat, and windy conditions in much of the Prairie provinces. Canada’s production is estimated lower by 0.5 million MT to 31.5 million MT because of a decrease in yield.

More than offsetting these reductions, production for the European Union (EU), the United Kingdom (UK), and Ukraine is projected higher by a collective 1.9 million MT. Both the EU and UK wheat production estimates are revised upwards by 700,000 MT each to 138.2 million MT and 14.8 million MT, respectively. Yields for the UK are expected higher with average to above[1]average rainfall and warmer temperatures. Wheat production in the UK is expected to grow 53 percent year-over-year. Similar favorable conditions in France have boosted expectations of production there. Elsewhere in the EU, production for Romania and Bulgaria are both raised, more than offsetting reduced output for Poland and the Czech Republic.Ukraine expects improvement in yields across all agroclimatic areas to bring their estimated yield to a new record of 4.18 metric tons per hectare (MT/ha).

Outside the major exporting countries, Pakistan is expected to reach a record production of 27 million MT. Yield is expected to increase in Pakistan by 0.1 MT/ha to 2.94 which is short of the 2017/18 record. Wheat production in Brazil is estimated up 100,000 MT to 6.9 million due to both an increase in area and yield. Moldova’s production is estimated up 100,000 MT to a record 1.3 million, with yield also forecast at a record (3.71 MT/ha) as Moldova has benefited from the same favorable conditions as Ukraine.

STEADY GLOBAL WHEAT CONSUMPTION

Projected 2021/22 world wheat consumption is fractionally lower at 790.9 million on lower feed and residual use in Russia, the United States, and Kazakhstan mostly being offset by higher food, seed, and industrial use in several countries. Food, seed, and industrial (FSI) consumption is adjusted upwards by 1.7 million MT to 628.3 million MT, driven mainly by Pakistan (+800,000 MT to 26 million), Nigeria (+500,000 MT to 5.3 million), and Algeria (+250,000 MT to 11.3 million). FSI for the EU is adjusted 650,000 MT lower in 2019/20 as COVID-related lockdowns are estimated to have reduced domestic use.

Feed and residual use is lowered by 172,000 MT with increases for the EU (+500,000 MT) and Thailand (+300,000 MT) more than offset by reductions for Russia (-500,000 MT), Kazakhstan (-300,000 MT), and the United States (-272,000 MT).

BOOSTED GLOBAL WHEAT TRADE

Global trade in 2021/22 is boosted by 1.5 million MT to 205.5 million on the trade year (July[1]June). Exports for Australia and the EU are boosted by 1 million MT each to 22 million and 34 million, respectively. Both have larger supplies and are positioned to take a greater share of global trade based on reduced trade for key competitors. Australia is poised to gain more share among some quality-sensitive buyers based on smaller exports from Canada and the United States. Exports are also boosted for Ukraine (+500,000 MT) and the United Kingdom (+150,000 MT), driven by larger supplies. Pakistan’s exports are raised for both 2020/21 (up 200,000 MT to 500,000) and 2021/22 (up 300,000 MT to 600,000) based on estimated border trade with Afghanistan.

Conversely, exports are reduced for Canada (-500,000 to 23 million) and Kazakhstan (- 500,000 MT to 7.5 million) based on reduced production estimates. Exports for the United States are also cut 500,000 MT to 24.5 million with dry conditions causing tighter supplies of soft white winter wheat and high-protein spring wheat.

The largest import revision for 2021/22 by far is Pakistan (+1.5 million MT to 2.5 million). Imports in that country are expected to surge with the Government’s recent decision to approve 3 million tons of imports during 2021/22 to boost strategic reserves.

Nigeria’s imports are boosted 400,000 MT to 5.6 million MT to keep pace with a strong pace of shipments in 2020/21. Imports are reduced 400,000 MT for the United Kingdom with larger domestic production. Imports for the United States are raised 400,000 MT on the expectation that tight supplies of durum and other spring wheat will result in larger imports from Canada.

ENDING STOCKS TIGHTENED

Ending stocks are reduced 5.1 million MT to 291.7 million in 2021/22, with major exporting countries accounting for many of the largest changes. U.S. stocks are lowered 2.9 million MT to 18.1 million, the lowest stock level since 2013/14. EU ending stocks are projected 900,000 MT smaller with stronger feed and export demand more than offsetting the increased size of its crop. Ending stocks for Kazakhstan and Russia are reduced to 600,000 and 500,000 MT, respectively, to account for smaller crops. Ukraine’s ending stocks are raised 150,000 MT to 1.7 million.

Ending stocks for Argentina, Australia, and Canada are unchanged. Exporter ending stocks collectively are down 4.7 million MT from last month to 58.5 million MT. Exporter-ending stocks are now projected up only slightly from the previous year and remain relatively tight relative to the previous several years. The balance of stocks among major exporters has shifted in the last few years with Russia’s stocks growing significantly as a result of its export duty regime. Russia’s stocks are projected larger than EU stocks and nearly catching up with U.S. stocks. Outside of the major exporting countries, there are a few other notable revisions to projected 2021/22 stock totals. Turkey’s stocks are projected down by 788,000 MT to 3.3 million, motivated by a reduction to beginning stocks based on smaller 2020/21 imports. Morocco’s beginning and ending stocks in 2021/22 are similarly reduced by 400,000 MT based on revised 2020/21 trade. Iran’s projected ending stocks are boosted 300,000 MT, driven by import revisions. Pakistan’s projected ending stocks are raised 300,000 MT to 4.9 million based on stronger 2021/22 imports as the Government has stated the goal of increasing its strategic reserves of wheat.

Global ending stocks for 2020/21 are reduced by 3.3 million MT to 290.2 million, partly due to the aforementioned stock adjustment for Pakistan. Furthermore, Australia’s ending stocks for 2020/21 are lowered 1 million MT to 4.4 million MT as reserves are drawn lower to meet its higher export total.

CORN

Corn production in 2021 is set to reach a new record, up 3.7 percent y/y, largely on increased outputs in China, the EU, Ukraine, and especially the US. Utilization in 2021/22 could grow by around 2 percent, supported by stronger demand for both industrial and animal feed applications. Trade is forecast to expand marginally in 2021/22 (July/June), with higher import demand from China still a leading driver, along with likely increase in purchases by the EU, Mexico, and Turkey. Stocks are forecast to contract for the fourth consecutive season, down 2.7 percent y/y, with the bulk of the drawdown again occurring in China and more than offsetting likely increases in the EU, South Africa and the US.

RICE

Rice production in 2021 to rise by 1.0 percent, as gains in Asia and, to a lesser extent, in West Africa and Australia overshadow cuts or stagnations elsewhere. Utilization in 2021/22 to expand by 1.4 percent primarily on rising food use, although another expansion in feed uptake is also expected. Trade in 2021 (January-December) still seen expanding, notwithstanding somewhat less buoyant import expectations for various African buyers. In 2022, growth in global exchanges tentatively seen stalling. Stocks (2021/22 carry-outs) seen marginally above their opening levels, as continued drawdowns in China are largely offset by expected accumulations elsewhere.