There remains a number of reasons for concern when it comes to North American wheat, with dry conditions affecting the Southwestern Plains of the United States, a slow start to spring fieldwork in the northern states, dry conditions on the Prairies and tight stocks.
The USDA's March 31 Grain Stocks reports shows U.S. stocks of wheat as of March 1 at the lowest level seen in 15 years. At the same time, AAFC's current forecast for Canada's July 31, 2023, show all-wheat stocks of 4.4 million metric tons (mmt) up from the previous year although the pace of exports remains ahead of the pace forecast by AAFC and may result in further downward revisions.
While there is supportive news close to home, two of three large analytical groups are showing reason for concern when global numbers are considered.
On April 6, the Agricultural Market Information System (AMIS) Market Monitor, an initiative of the G20 Ministers of Agriculture, plus Spain and seven major exporting and importing nations, revised higher its forecast for global wheat production in 2022-23 by 2 mmt, largely due to a 2.6 mmt upward adjustment to Australia's production potential. This brings the AMIS production forecast to 796.6 mmt for 2022-23, which compares to 801 estimated by the International Grains Council (ICG) and 788.9 mmt estimated by the USDA. Global utilization was revised 600,000 mt higher by AMIS, while ending stocks for 2022-23 were revised 3.8 mmt higher to 309.5 mmt, up 15.6 mmt or 5.3% from 2021-22.
As seen on the attached chart, the year-over-year change in AMIS stocks is in agreement with the International Grains Council, who on March 16, estimated stocks to grow by 11.6 mmt or 4.2% from 2021-22 to 2022-23 to 286.2 mmt.
The USDA takes a different view on this particular forecast, with the most recent March 8 forecast showing a year-over-year drop in stocks from 271.4 mmt to 267.2 mmt, down 4.2 mmt or 1.5% for a third consecutive drop in year-end global stocks.
It is interesting to note that today's reported data excluding Chinese stocks would indicate that AMIS is forecasting stocks to rise by 8.3 mmt for the world excluding China, while the IGC is forecasting these stocks to increase by 4.9 mmt and the USDA forecast a 7.1 mmt drop in March.
This bears watching when the USDA reports on April 11. Ahead of this report, the average of Dow Jones pre-report estimates is pointing to a slight reduction of 100,000 mt in the USDA's global wheat stocks estimate to 267.1 mmt.
Cliff Jamieson can be reached at email@example.com
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