The latest USDA WASDE report (published 9th June) was in line with market expectations, thus ensuring that the market dynamics at this point are stable. The 2023/24 wheat world ending stocks increased by 2.4% month-on-month (m-o-m) to 270.7 million mt, largely driven by higher carry-out in Russia, Europe and India, suggesting no major price increases. According to market sources, the future of the wheat stock will depend on the success of the northern hemisphere crop, with the weather as the major variable. The increase in 2023/24 stock figures is as result of a higher global production forecast, up 1.3% m-o-m to 800.1 million mt (a record crop), primarily on larger production in Russia (+4.3% m-o-m to 85 million mt), India (+3.2% m-o-m to 113.5 million mt), Europe (+1.1% m-o-m to 140.5 million mt), and Ukraine (+6.1% m-o-m to 17.5 million mt). Favourable weather conditions for the wheat crop have supported higher production in these countries.
Global 2023/24 wheat consumption has also increased by 4.4 million mt to 796.1 million mt this month due to higher feed and residual use for China, India and Russia. The recent heavy rains and floods in China’s Henan province (which accounts for 27% of China’s wheat) just days ahead of harvest caused yield and quality issues that have resulted in larger supplies of feed-quality wheat as China’s feed and residual is raised by 6.3% m-o-m to 34 million mt.
Global trade rose by 1.4% m-o-m 2.9 to 212.6 million mt, due to expectations of higher exports by Russia (+2.2% m-o-m to 46.5 million mt), Europe (+1.3% m-o-m to 38.5 million mt), and Ukraine (+5% m-o-m to 10.5 million mt).
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