2023/24 Wheat Outlook: Abundant Supplies, Shifting Trade, and Price Dynamics

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2023/24 Wheat Outlook: Abundant Supplies, Shifting Trade, and Price Dynamics
Credit: © Reuters.

The 2023/24 wheat forecast reveals increased U.S. supplies, a decrease in domestic consumption, and stable exports, while global production dips in multiple countries but surges in Russia, impacting global trade. Ending stocks grow globally due to these shifts, with notable variations in key nations like India, Argentina, and Russia.

2023/24 Outlook for U.S. Wheat

Supply Increase: The forecast suggests larger supplies, primarily due to increased imports, expected to reach 145 million bushels, and augmented beginning stocks.

Decreased Domestic Use: Domestic use is expected to decrease by 4 million bushels to 1,155 million, mainly attributed to reduced food use, as highlighted by the NASS Flour Milling Products report. This reduction is notable, with the July-September wheat usage in milling reported as the smallest for this quarter since at least 2014.

Unchanged Exports: Despite the alterations in domestic use and supply, the forecast for exports remains constant.

Higher Ending Stocks: The adjustments in supply and domestic use culminate in a higher projection for ending stocks, increasing by 14 million bushels to 684 million.

Projected Farm Price: The projected 2023/24 season-average farm price is decreased by $0.10 per bushel to $7.20, reflecting an expectation of lower prices for the rest of the marketing year.

2023/24 Outlook for Global Wheat

Increased Supplies: Global supplies are anticipated to rise, reaching 1,051.5 million tons, primarily due to increased beginning stocks, compensating for a decline in global production.

Decline in Global Production: Despite the overall supply increase, the global production forecast is lowered to 782.0 million tons, mainly attributed to decreases in various countries, including India, Argentina, Kazakhstan, the United Kingdom, and Brazil. This decline is partially offset by a significant increase in Russia's forecast production.

Reduced Trade Forecast: The global trade forecast is expected to decrease to 205.0 million tons, primarily due to reduced exports from countries such as Argentina, India, and Egypt, partially offset by an increase in Ukraine's exports.

Larger Ending Stocks: The global ending stocks projection is raised to 258.7 million tons, mainly driven by increased forecasts for Russia, China, and Argentina, compensating for declines in stocks for India, Ukraine, and Brazil.

Conclusion

The 2023/24 wheat outlook portrays a dynamic landscape with rising U.S. wheat supplies and changing consumption patterns, reflecting shifting consumer demands. Meanwhile, the global wheat market experiences a mixed bag, with production woes in countries like India and Argentina countered by Russia's robust output. These fluctuations in supply and demand underline the importance of monitoring trade dynamics and global production trends to navigate the wheat market effectively in the coming year.

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