US New crop Wheat supply Outlook – 04/19/2023

The USDA estimated area planted to all wheat will increase significantly this season, but the poor condition of the winter wheat crop signals a tight supply/demand balance during the 2023/2024 crop year. Based on mid April reports we estimate the US wheat crop in 2023 at 1.76 billion bushels. USDA’s  benchmark usage forecast for the 2023/2024 crop year is 1.95 billion bushels suggesting a reduction in US wheat carryout stocks unless imports increase substantially from recent year’s level.

Lack of  wheat supplies has restricted US wheat exports in recent years. US wheat exporters are likely to face increased competition in 2023/2024 as foreign wheat farmers respond to relatively high wheat prices by increasing wheat seedings.

The USDA has issued an El Nino advisory for this summer which is bad news for Australian wheat producers as El Nino often brings drought conditions to major wheat areas. Canada was favored by excellent weather last season leaving room for possible disappointment this season. The  Australian wheat crop will be harvested during the late Austral summer (late Autumn in the US).

The conflict in the Ukraine increases uncertainty in the world wheat outlook, but combined wheat exports from the Former Soviet Union increased in the 2022/2023 crop year and we assume shipments will continue with minor interruptions again in 2023/2024.