The USDA December World Ag Supply and Demand report hit the wires last night.
Looking at the projected 2022-23 world wheat carry in and production we see carry in back a smidge to 276.27mt. We see world production is reduced 2.09mt to 780.59mt, imports are higher, domestic consumption lower, the net result is a slight drop in ending stocks from 267.82mt in November to 267.33mt in December. This is a 490kt reduction in ending stocks. It’s not huge, but it’s not bearish.
The main adjustments lower were to the major exporters, not bearish news. Argentine wheat production was reduced from 15.5mt to 12.5mt, more in line with trade expectations. With the current domestic consumption and export activity that the USDA expect to see from Argentina it would result in a carryover stocks number on less than 1mt, just 930kt of carry over wheat.
Canadian wheat production was reduced to 33.82mt, back 1.18mt from the November estimate.  Canadian exports were left unchanged but domestic consumption was reduced 550kt, mainly due to less wheat going into the feed ration. The net result a reduction in carry out of 620kt. The reduction in the Canadian carry out counters the projected increase in Australian carry out. The USDA increased Aussie wheat production 2.1mt, from 34.5mt to 36.6mt. I’m not convinced this is accurate given the level of disease in eastern states and the number of empty heads. There’s plenty of 3t crops coming off 5t stubble at present. Anyway, these are the numbers. The USDA increased Aussie exports from 26mt to 27.5mt, the net result is a slight increase in carry out, from 3.65mt to 4.25mt. Looking at the level of export demand we are currently seeing from the trade one could conclude that a lot of that export activity, especially off the east coast, will be during Q1 – Q2 in 2023.
Russian exports were increased from 42mt to 43mt, Ukraine exports were increased from 11mt to 12.5mt, Chinese data was left unchanged.