• IKAR in Mass Media

 

 → IKAR in Mass Media → #3536

IKAR in Mass Media

Column: In recurring fashion, wheat supplies in major exporters to hit 16-year low

19 мая 2023 года

NAPERVILLE, Illinois, May 16 (Reuters) - Relative to demand, global wheat supplies among major exporters in 2023-24 are seen at the lightest levels since 2007-08, nearly identical to the year-ago outlook that contributed to high wheat prices.

Global wheat prices are around 45% lower now versus mid-May 2022, perhaps somewhat justified by a looser-than-expected conclusion to 2022-23.

Plenty of uncertainty around global wheat production and trade remains, especially in the Black Sea, since 2023-24 grain crops are far from settled. However, predictions for multi-year supply lows may be more common than realized.

The U.S. Department of Agriculture’s initial 2023-24 estimates issued on Friday suggest wheat stocks-to-use (SU) among major exporting countries will fall to 13.9% by mid-2024, below the 10-year average of 16.8%.

That would be the lowest SU since 13.1% in 2007-08 and down from 15.5% in 2022-23, which marked a three-year high. But that performance was not initially expected for the current year.

Wheat SU among major exporters in May 2022 was pegged at a 15-year low of 13.5% for 2022-23, expanding to 13.75% by February 2023. This month, USDA’s 2022-23 estimates show slightly bigger production and notably lighter consumption versus the February ones, especially consumption in Russia, Ukraine and Europe.

This SU trend in major wheat exporting countries is not exclusive to 2022-23. Midway through 2021-22, an all-time low of 12.6% was forecast for that year compared with its latest figure of 15.1%.

Another randomly chosen example from late 2018 showed major exporter SU in 2018-19 projected at 13.6%, the lowest since 2007-08 but well below the roomy final of 18.1%.

This suggests the current outlook for 16-year SU lows is less menacing than it appears, but the below-average levels still warrant attention, especially as falling prices could create additional demand.

WARTIME

Global grain trade has looked a little different since Russia’s February 2022 invasion of Ukraine, reducing both Ukrainian production and exports. Last year, Ukraine’s performance was better than originally expected, but volumes are seen lower this year.

USDA has 2023-24 Ukraine wheat production at 16.5 million tonnes with exports at 10 million, down from 20.9 million and 15 million in 2022-23, respectively.

However, those numbers likely assume continuation of the Black Sea grain deal, which Russia has threatened to quit this coming Thursday. Although Moscow denied any progress, Turkey said Friday that all involved parties were close to reaching an agreement.

On a perhaps related note, Turkish President Tayyip Erdogan on Sunday faced a presidential election, which will go to a May 28 runoff.

But some analysts say it might not matter if the deal is not renewed this week since smaller 2023 Ukrainian crops could be mostly exported via Europe, although it would be pricier.

OTHER HOTSPOTS

In top exporter Russia, USDA shows 2023-24 wheat production down 11% from last year's record, though exports are seen edging up 2% to a new high. Russia and Ukraine had recently accounted for as much as 29% of global wheat exports.

Wheat yields in Australia are already being discounted to four-year lows due to the incoming El Nino, conducive to dry weather there. Australian exports are seen falling nearly a third in 2023-24 to 21 million tonnes after three bumper crops.

The opposite is seen for Argentina as El Nino is expected to pull the grain belt out of historic drought and boost wheat output 45% on the year, according to the Buenos Aires grains exchange.

The U.S. wheat export share is seen hitting an all-time low of 9% in 2023-24 since production of its largest wheat class, hard red winter (HRW), is seen at a 66-year low due to extreme drought.

USDA's May HRW wheat forecasts are typically closer to the final in poorer yielding years versus stronger ones, so there may not be much additional downside. However, most of the growing season still lies ahead for U.S. spring wheat, sought after due to its high protein content.

India exported a record 8 million tonnes of wheat in 2021-22, but despite a record crop prediction for 2023-24, the country’s export ban means future shipments will be minimal. That ban is not expected to be lifted anytime soon according to this month’s update from USDA’s New Delhi post.

https://reuters.com/

Source: Reuters  |  #grain   |  Comments: 0   Views: 7

There are no comments yet. Be the first!

Only authorized users can comment.