In W19 in the wheat landscape, the FAO expects global wheat production in the 2023/24 season to reach around 785MMT, the second-highest on record, but lower than the 2022/23 harvest due to decreases in Australia and Russia compared to their record production of 2022/2023. Specifically, the FAO highlights that in Europe the abundant rainfall received in April in most countries increased the level of soil moisture and improved the yield prospects for the 2023 wheat crops. Consequently, the EU production forecast was slightly increased to 139.5MMT, but overall production prospects remain constrained by the effects of rainfall deficits in Spain and Portugal. Strategie Grains, in its May report, forecasts EU soft wheat production in the 2023/24 season to reach 130MMT, up by 1.1MMT compared to the previous estimate and up 4.8MMT compared to the harvest in MY 2022/23. High soft wheat yields are expected in most EU countries except Spain due to drought experienced in the country. In its first forecast for the 2023/24 season, the USDA predicts a decrease in the Russian gross wheat harvest to 81.5MMT. In the 2022/23 season, the USDA outlines that the Russian wheat harvest reached 92MMT, much lower than the estimate of the Ministry of Agriculture of the Russian Federation, standing at 104.2MMT. Despite the decline in the harvest, Russian wheat export potential is expected to increase from 44.5MMT in 2022/23 to 45.5MMT in 2023/24.
The USDA reports that as of the week ending May 5th, US wheat export inspections reached 209.14K MT, down 149.14K MT from the previous week and 53.78K MT compared to the same week in 2022, with shipments mainly destined for Mexico and Ethiopia. With less than a month left in the 2022/23 season, US wheat export inspections are 18.458MMT, down compared to 19.03MMT in the same period in the 2021/22 season. The USDA also outlines that in W18, 29% of the US winter wheat crop was in good to excellent condition, 1% above the previous week and matching a year ago levels, and 38% had headed, compared to 35% on average. Meanwhile, 24% of US spring wheat was planted, down compared to 38% normally covered in the same period yearly due to wet weather in the northern Plains, with 5% emerging, compared to 11% on average. Furthermore, the USDA expects US wheat production in the 2023/24 season to reach 48.5MMT, up from 44.91MMT in 2022/23 MY, with the winter wheat crop accounting for 33.25MMT, an advance from 30.05MMT produced in the previous harvest. On the Chicago Stock Exchange on May 8th, wheat prices increased for the third consecutive day, driven by investors awaiting information on the possible renewal of the agreement, which is expected to expire on May 18th, to export grain from Ukraine through the Black Sea corridor. The most traded wheat cereal contracts, expiring in July, showed an increase of 2.36%, reaching USD 6.6025 per bushel.
Australian containerized wheat exports in March 2023 reached 314.86K MT, up 40% MoM, with shipments mainly destined for China (+69%), the Philippines, Taiwan, and Thailand. Ahead of the UK-Australia Free Trade Agreement coming into effect, Australian containerized wheat exports almost tripled to 3,957MT in March, up from 1,370MT in February, and much less in preceding months. Australian bulk wheat exports were mainly destined for China, increasing by 59% MoM to 1.039MMT, Indonesia (317.15K MT), Vietnam (306.17K MT), Thailand (291.95K MT), the Philippines (290.13K MT), and South Korea (280.09K MT). CONAB reports that the Brazilian designated area for wheat in the 2022/23 season is expected to reach 3.3M ha, an increase of 7% YoY, with main producing states, Paraná and Rio Grande do Sul, representing around 84% of national production, planting is still incipient. Brazilian wheat production in the current harvest is expected to reach 9.6MMT. ANEC expects Brazilian wheat exports in May 2023 to reach 70.15K MT, down 67% MoM and 35.7% YoY.
EFEAGRO data indicates that the prices of cereals in the Spanish markets have maintained their general downward trend in W18 despite the drought and its imminent effects on the harvests, with soft wheat prices declining by 2.16% WoW in the wholesale markets. So far in May 2023, Spanish soft wheat has fallen by 2.1% to USD 303.56/MT. Lastly, GTC indicates that Iranian wheat purchases in seven provinces with warm weather in southern and southeastern Iran reached 1MMT in more than a month ending early April, an increase of 32% compared to the same period in 2022. GTC also expects Iranian domestic wheat purchases in 2023 to total 8.5MMT, an increase of 13%. According to the quarterly global Crop Prospects and Food Situation report, 2023 Iranian wheat production is expected to remain the same at 13MMT.
