The USDA Wheat Outlook for the 2022/23 marketing year has lowered expectations for global production, as well as consumption. Also, higher exports and slightly larger inventories are expected as compared to last month. Production declined by 1.8 million tonnes to 771.6 million tonnes from the previous month. Compared to last year, the global wheat harvest will be 7.4 million tonnes smaller.

Harvest volumes for the European Union, Ukraine and Argentina have been revised downwards. These improvements were only partially offset by larger crops in Canada, the United States, and Russia. The ongoing drought reduced EU production by 2.0 million tonnes to 134.1 million. According to the USDA, this is due to low harvests in Spain, Italy and Germany. Production in Ukraine fell by 2.0 million tonnes to 19.5 million tonnes. The reason for this is the reduction in the area to be harvested.

On the other hand, production in Canada will increase by 1.0 million tonnes to 34.0 million tonnes. The background area is larger than initially expected. The Russian harvest raised the USDA by 0.5 million to 81.50 million, far lower than estimates by Russian and other international analysts who see a Russian wheat crop of up to 89 million tons as a possibility.

USDA increased world trade by 0.9 million tonnes to 205.5 million tonnes. Higher exports from Canada and the United States are partially offset by lower exports from Argentina and the European Union.

USDA slashed EU exports from 36.0 million tonnes to 35.50 million tonnes. Russia’s export prospects remained unchanged at 40 million tonnes.

Global consumption decreased by 1.8 million tonnes to 784.2 million, mainly due to reduced feed use in the European Union and Ukraine. Global end 2022/23 stocks rose 0.7 million tonnes to 267.5 million, but remain at their lowest level since 2016/17.