Canada Markets

After a sharp drop in 2021 United States hard red spring wheat production in 2021, the USDA's July World Agricultural Supply and Demand Estimates (WASDE) report shows production rebounding by 53.9% in 2022 to 457 million bushels, or 12.4 million metric tons, while is still 1.5% lower than the five-year average.

Despite the increased production forecast for 2022, imports of HRS are forecast to rise to 50 mb, or 1.361 mmt, up 16.3% from the 2021-22 estimate, while 16% below the five-year average.

Forecasts also point to total use at 521 mb or 14.2 mmt, exceeding production for a fourth consecutive year, according to USDA tables, while for the 12th time in 13 years. This includes exports of 230 mb or 6.260 mmt, up 9.5% from 2021-22 while 8.1% below the five-year average.

As a result, HRS stocks are forecast to fall to 126 mb, or 3.429 mmt, as shown by the green bar on the attached chart, down for a third consecutive year to the lowest level of stocks seen since 2007-08 or the lowest in 15 years. This is 43% below the five-year average.

As seen on the attached chart, stocks as a percent of use is forecast to fall to 24.2% in 2022-23, down from a recent high of 50.4% calculated for 2019-20. This would be the tightest stocks as a percent of use seen since 2007-08 when stocks accounted for 12.4% of use.

Note that the USDA's June 30 Acreage report points to July surveys of producers in Minnesota, North Dakota and South Dakota due to this spring's late planting, which could lead to an upward revision of acres and bears watching.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

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