USDA cuts 2021-22 global wheat trade estimate to 200.1 million mt

The US Department of Agriculture reduced its estimate for global wheat trade for marketing year 2021-22 to 200.1 million mt in April, from 203.1 million mt seen in March.

The projection of lower trade is likely from poor exports from the EU, Ukraine, the US, and Kazakhstan, the USDA said in its World Agricultural Supply and Demand Estimates report, released April 8. The likelihood of an increase in exports from Russia, Brazil, and Argentina may not be able to mitigate the shortfall in supply, it added.

A likely decline in supplies is seen pushing prices of the grain in the global market higher in the near term. The United Nations Food and Agriculture Organization, in its food price index report April 8, has said wheat prices rose nearly 20% in March from February because of the Russia-Ukraine war and poor US crop conditions.

The USDA has projected EU's wheat exports to decline to 34 million mt from 37.5 million mt a month ago.

It has scaled down Ukraine's wheat exports for MY 2021-22 by 1 million mt from March to 19 million mt. For the US, it has reduced its export estimates slightly to 21.4 million mt from 21.8 million mt last month.

On the other hand, the USDA increased its export projections for Russia by 1 million mt to 32 million mt, and for Brazil by 800,000 mt to 2.5 million mt, the report added.

The USDA has increased its wheat export estimates for Argentina to 14.5 million mt, up 500,000 mt from the March update.

A likely rise in exports from Brazil and Argentina may lead to the emergence of new trade flows amid tightening supplies from the Black Sea region.

However, the USDA has maintained its export estimates for Australia, Canada, and India at 27.5 million mt, 15.5 million mt, and 8.5 million mt, respectively.

Australia and India became major wheat suppliers after exports tightened from Russia and Ukraine.

Production, Ending Stocks

The USDA has largely maintained its estimates for global wheat output in MY 2021-22 at 778.8 million mt.

It has reduced, however, the EU's wheat output to 138.4 million mt from 139 million mt seen last month. But a likely increase in Argentina's wheat production to 21 million mt from 20.5 million mt is seen compensating EU's shortfall.

The USDA has reduced its projection for wheat ending stocks to 278.4 million mt, down from 281.5 million mt seen last month, the WASDE report said. The fall in the ending stocks is primarily from a decline in inventories in India and Russia.

The fall in the ending stocks is likely from an anticipated increase in global wheat consumption, according to the report. The USDA has increased its estimates for global wheat consumption to 791.1 million mt from 787.3 million mt.

The USDA has projected an increase in domestic consumption of wheat in India and the EU.