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HIGHLIGHTS FOR 2017/18

Global wheat production is projected at 738 million tons, down 15 million from the 2016/17 record, but still the second highest on record. Production among the major exporting countries is down a net 29 million tons. Projected gains in Argentina and the EU are not enough to offset declines in Australia, Canada, Kazakhstan, Russia, Ukraine and the United States. In the EU, production is expected to be up about 4 percent from last year’s low crop. Farmers in Argentina are projected to produce more wheat as area planted is expected to expand once again. Production in Canada is forecast lower with a reduced yield more than offsetting slightly higher area. Russia’s wheat crop is expected to be down from last year, but still the second highest on record. Production in Ukraine is expected down about 7 percent on lower yields. U.S. production is projected well below last year with the lowest area harvested on record. China’s wheat production is projected up for 2017/18, rebounding from lower yields and crop quality issues in the previous year. India’s crop is forecast at a record, rebounding substantially from the prior two years. Morocco’s production is forecast twice as large as last year’s drought-reduced crop. Brazil’s crop is forecast down 17 percent, mainly on lower expected yields. Production in Ethiopia is forecast slightly higher, while South Africa is projected nearly unchanged.

Global consumption is forecast down marginally as reduced feed (and residual) use is expected to more than offset rising food use. Wheat used as a component in animal feed rations is projected to decline slightly due to greater utilization of coarse grains, particularly in China, the EU, Indonesia, and Thailand. Food use of wheat, however, continues to be on the rise in most regions. Surging consumption in South and Southeast Asia is driven by population growth, urbanization, and rising incomes.

Global ending stocks for 2017/18 are projected to reach a new record of 258 million tons, up almost 3 million from last year. China’s burgeoning stocks are expected up 17 million tons from the previous year, accounting for nearly half of global wheat stocks. Projected ending stocks, excluding China, are actually down year-to-year.

Ending stocks in the eight major exporting countries collectively are projected to drop in 2017/18 after reaching a six-year high in 2016/17. With a smaller crop and continued export demand, U.S. ending stocks are forecast down from the highest level in nearly 30 years. Stocks in Australia and Canada are also forecast lower with smaller crops. Stocks in the EU are forecast to tighten with larger exports. Black Sea stocks are forecast lower with smaller crops in all three countries. Stocks in Argentina are forecast to remain tight in spite of a larger crop as export demand is expected to continue to absorb most of its supplies.

Selected Importers 2017/18

Global trade is forecast up 1 percent from the prior year’s record with larger imports expected across many regions. Changing diets in Bangladesh and Indonesia are expected to drive up demand. EU imports are expected larger in spite of a bigger overall crop. Conversely, China, India, and Morocco are expected to import less due to rebounding production. Thailand is also forecast to reduce its imports based on feed wheat import restrictions. The United States is projected to import slightly more with a smaller crop.

  • Egypt is up 500,000 tons to 12.0 million on growing demand and tight carryin supplies.
  • Indonesia is up 500,000 tons to 9.5 million despite feed wheat import restrictions. Indonesia continues to have a strong demand for a more wheat-based diet.
  • Algeria is unchanged at 8.0 million tons as a larger crop meets growing consumption demands.
  • Brazil is down 600,000 tons to 6.9 million as stocks have recovered from the low levels of the previous few years. Consumption is still forecast slightly higher.
  • Bangladesh is up 800,000 tons to 6.8 million on growing population and a dietary shift from rice to wheat.
  • EU is up 1.0 million tons to 6.5 million in spite of a larger overall crop based on expectations of smaller production in Italy and Spain.
  • Japan is down 100,000 tons to 5.8 million due to lower expected feeding, but food use remains stable.
  • Turkey is up 1.3 million tons to 5.8 million based on tight carry-in supplies and demand for high-quality wheat for processing into flour and exporting.
  • Philippines is up 150,000 tons to 5.7 million based on economic and population growth as well as low wheat prices. The United States is expected to supply over half of the country’s import demand.
  • Mexico is steady at 5.2 million tons with continued strong demand for wheat products.
  • Morocco is down 600,000 tons to 4.9 million with a much larger crop.
  • Vietnam is down 200,000 tons to 4.8 million due to lower expected feeding, but food use continues to grow as economic conditions improve and population rises.
  • South Korea is down 150,000 tons to 4.5 million on reduced wheat feeding.
  • Nigeria remains at 4.5 million tons with the expectation that economic conditions will constrain growth in wheat consumption.
  • India is down 2.0 million tons to 4.0 million based on expected larger production. However, India is still expected to import a large amount of wheat to rebuild domestic stocks and to meet consumption demand from a growing population.
  • Saudi Arabia is up 100,000 tons to 3.8 million based on growing demand for wheat.
  • Yemen is up 200,000 tons to 3.4 million as consumption is expected to rebound slightly. 2016/17 imports have been constrained by political instability and financial constraints.
  • The United States is up 200,000 tons to 3.3 million with a much smaller crop.
  • China is down 1.2 million tons to 3.0 million based on an expected larger crop that has the potential to better meet domestic milling needs.
  • Thailand is down 600,000 tons to 3.0 million on reduced wheat feeding. More corn will be incorporated into feed rations in light of feed wheat import restrictions.
  • Uzbekistan is up 100,000 tons to 2.8 million on growing domestic demand.
  • Afghanistan is down 100,000 tons to 2.6 million on difficulties in receiving shipments from Pakistan.
  • Iraq is up 200,000 tons to 2.5 million based on a smaller crop and growing demand. Imports are primarily wheat flour from Turkey
  • Sudan is up 100,000 tons to 2.5 million on rising consumption.
  • Peru is up 250,000 tons to 2.2 million on growing demand for wheat products.
  • Colombia is up 100,000 tons to 2.1 million based on rising food and feed use of wheat.
  • Iran is up 800,000 tons to 2.0 million based on a smaller crop and growing demand.
  • Tunisia is up 200,000 tons to 2.0 million to meet demand and to rebuild stocks.
  • Malaysia is up 100,000 tons to 1.8 million based on rising population and incomes as well as growing demand for a more Western diet.
  • Israel is stable at 1.7 million tons as domestic use is unchanged from the previous year.
  • South Africa is up 100,000 tons to 1.6 million with growing domestic demand.
  • Azerbaijan is up 300,000 tons to 1.6 million to offset a reduced crop.
  • Jordan is up 100,000 tons to 1.3 million on continued demand from growing population.
  • Ethiopia is down 300,000 tons to 1.2 million as wheat consumption is returning to more normal levels.
  • Syria is up 200,000 tons to 1.2 million on a reduced crop.

Selected Exporters 2017/18

With global trade forecast slightly higher and abundant supplies projected in major exporting countries, competition for market share will intensify in 2017/18. Exports for the European Union are forecast to rebound with a larger crop, making it once again the largest exporter. This will limit the market share for the United States, which is expected to be the leading exporter in 2016/17.

  • The EU is up 4.0 million tons to 31.0 million based on a rebounding domestic crop.
  • Russia is up 1.0 million tons to a record 29.0 million based on abundant carry-in supplies, expectations of another large crop, and consequently, competitive new-crop prices.
  • The United States is down 1.3 million to 27.0 million on a much smaller crop. However, the year-to-year reduction in exports is minimal in light of large carry-in supplies and growing global demand.
  • Canada is up 2.0 million tons to 22.0 million on continuing demand for high-protein wheat. Larger beginning stocks will provide a partial offset to a smaller crop.
  • Australia is unchanged at 22.0 million as large carry-in supplies from a record-large crop are expected to offset a smaller crop in 2017/18. Australia is expected to remain a top wheat exporter, especially to Asia.
  • Ukraine is down 2.8 million tons to 14.5 million based on a smaller crop and tight carryin supplies.
  • Argentina is unchanged at 11.0 million tons with expectations of another large crop.
  • Kazakhstan remains at 7.0 million tons on continuing regional demand.
  • Turkey is unchanged at 6.0 million tons based on continued flour exports.
  • Mexico is down 100,000 tons to 1.4 million based on a smaller domestic crop.
  • Serbia is down 200,000 tons to 1.1 million with a crop that is 20 percent smaller than the 2016/17 bumper crop.
  • Brazil is up 200,000 tons to 1.0 million as exports return to normal after a slow year.

2016/17 OVERVIEW

Global production, already at a record, is raised marginally. Global trade is lowered slightly to 178.8 million tons as lower imports for Algeria and Syria more than offset increases for Bangladesh, China, and Saudi Arabia. Exports for the EU are raised, while Australia and Brazil are cut. U.S. exports are also raised, making the United States once again the largest exporter. The U.S. season-average farm price for 2016/17 is revised up $0.05 to $3.90 per bushel, while season-average farm prices in 2017/18 are projected higher with the midpoint of the range at $4.25.

US PRICES:

Wheat prices experienced mostly modest fluctuations in April as the market awaited additional information on the upcoming Northern Hemisphere harvests. Hard Red Winter (HRW) gained $5/ton to $196 based on concerns regarding snow in Western Kansas, while Hard Red Spring (HRS) rose marginally by $1/ton to $252. Soft Red Winter (SRW) declined $3/ton to $197 and Soft White Winter (SWW) also fell by $5/ton to $193.

TRADE CHANGES IN 2016/17

Selected Importers

  • Algeria is down 200,000 tons to 8.0 million based on the slow pace of trade.
  • Bangladesh is raised 200,000 tons to 6.0 million based on strong growth in food use, spurred by growing incomes and changing tastes and preferences.
  • China is up 200,000 tons to 4.2 million based on domestic crop quality issues and strong U.S. export sales.
  • Saudi Arabia is raised 200,000 tons to 3.7 million based on the strong pace of imports from the EU.
  • Syria is halved to 1.0 million tons based on the weak pace of trade. Consumption is estimated lower as many Syrians remain in other countries, particularly Jordan and Lebanon.

Selected Exporters

  • Australia is down 1.0 million tons to 22.0 million based on logistical challenges of getting the record-large crop to port.
  • Brazil is cut 600,000 tons to 800,000 based on the slow pace of feed-quality exports.
  • The EU is boosted 500,000 tons to 27.0 million based on the strong pace of trade.
  • United States is up 500,000 tons to 28.3 million based on the strong pace of sales and shipments. Demand from key markets, particularly Mexico and Nigeria, has strengthened in recent months.