USDA: Global wheat production to reach new record
In the United States, vast stretches of wheat growing regions have production problems. The central and southern U.S. plains endured persistent drought, late spring freezes and hail storms, reducing prospects for hard red winter (HRW) wheat production. A wet spring has delayed spring plantings in the northern plains and could result in lower than expected spring acreage. USDA estimates total 2013/14 U.S. production will reach 56.0 MMT, down 9 percent from last year and below the five-year average of 60.1 MMT. Although USDA won’t release by-class supply and demand estimates until July, higher soft red winter wheat (SRW) production is expected to somewhat offset lower production of other classes. USDA predicts U.S. exports will decline 10 percent to 25.2 MMT, but with production declines, it expects carry out stocks to fall 8 percent to 18.2 MMT, the lowest since 2008/09.
On the demand side, USDA estimates global wheat consumption to reach a new record high of 692 MMT. Lower wheat prices are expected to push food use higher in many countries and greater production in the Black Sea and the European Union will increase feed use. Domestic use in China, the world’s largest wheat consumer, is expected to rise less than 1 percent to 121 MMT, the second highest on record. India, the world’s second largest wheat consumer, will use a record 87.0 MMT of wheat in 2013/14. Neither China nor India import significant amounts of wheat due to sufficient domestic production but USDA expects total wheat trade to increase 4 percent to 143 MMT, 1 percent greater than the five-year average.
USDA expects Egypt to increase imports by 13 percent in 2013/14 to 9.0 MMT, which would still be 11 percent lower than the five-year average. Indonesia is the only other top-six importer expected to increase imports, up 6 percent to 7.0 MMT and 15 percent greater than the five-year average. USDA projects imports by Brazil, Algeria, Japan and South Korea will decline in 2013/14.
USDA expects record production to trump record consumption and increase 2013/14 global carry out stocks an estimated 3 percent to 186 MMT. If realized, the amount of wheat left in the bins to start marketing year 2014/15 would remain 2 percent below the five-year average. China will account for more than 33 percent of total carry out stocks with an estimated 61.8 MMT.
Our customers can keep up with changes to USDA’s estimates as the year progresses in the USW Supply and Demand report, updated every month within a day or two of the WASDE release.
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