Key Competitors' Wheat Output Boosted This Month
World wheat production forecast for 2013/14 soared 5.0 million tons this month to 711.4 million, exceeding the record wheat output of 2011/12 by 14.1 million tons and surpassing that year's record yield by 0.09 tons/hectare (or 2.9 percent). The largest increase in 2013/14 wheat production is a 4.3-million-ton rise to 37.5 million for Canada, based on the November farm surveys results published by Statistics Canada. The increase confirmed USDA's previous assessments of a remarkable record-setting growing season and excellent harvest weather with the additional benefit of later-than-usual autumn freezes. Area harvested for wheat is up slightly this month to 10.4 million hectares, and the off-the-charts yields are 21 percent higher than the previous record of 2011/12 (and more than a quarter higher than the average of the last 5 years).
Australian 2013/14 wheat production is projected 1.0 million tons higher this month at 26.5 million, the third largest wheat crop in the country's history, with area slightly lower this month, down 0.2 million hectares to 13.5 million. Wheat production for the previous 2012/13 crop year is also revised up 0.4 million tons to 22.5 million, with a 0.5-million-hectare lower wheat area. The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) raised their production forecast for the current 2013/14 year to 26.2 million tons, while the Australian Bureau of Statistics (ABS) upgraded the production estimate for the previous 2012/13 crop year.
Last month we reviewed the growing conditions in all Australian States in detail (see http://usda01.library.cornell.edu/usda/ers/WHS//2010s/2013/WHS-11-13- 2013.pdf). To sum up, the growing conditions have been very favorable in the Western Australia (particularly in the southern and central parts of the State), and in the eastern producing States of South Australia and Victoria along the southern coast of the continent. However, precipitation was far from sufficient in parts of Queensland and New South Wales, particularly around the border between the two States. By the end of November, the wheat harvest had been virtually completed in these two States, and is currently moving into the south of the continent and to Western Australia, the regions that have benefited the most from the country's favorable weather. About 50 percent of the country's total wheat area has been harvested, with better-than-expected results.
Wheat production in the European Union is adjusted slightly down this month by 0.2 million tons to 143.1 million, with partly offsetting changes for Denmark (down 0.45 million tons), France and Netherlands (up 0.1 million tons each). South African wheat production is also slightly adjusted, reflecting the new estimates of the National Crop Estimates Committee (NCEC).
Changes in world wheat beginning stocks are pretty small, up 0.2 million tons, adding only slightly to already expanded supplies. Beginning stocks are up 0.5 million tons in Australia, reflecting the higher 2012/13 wheat production estimate, and down 0.3 million tons in Kazakhstan, based on an adjustment of wheat food and feed consumption series for a number of years. Small offsetting changes are made for beginning stocks for the EU and South Africa.
World Wheat Use Up Slightly, Feed Use Trimmed
Global consumption of wheat in 2013/14 is projected up 1.0 million tons this month to 704.5 million mostly reflecting local marketing year adjustments to imports and exports as changes to feed and food use are mostly offsetting (for detailed explanation of how changes in exports and imports can affect calculated global consumption, see the special article in the Feed Outlook published in June 2013 http://usda01.library.cornell.edu/usda/ers/FDS//2010s/2013/FDS-06-14-2013.pdf). A 1.0-million-ton reduction in wheat feed use is forecast for the EU, as wheat is being partly replaced with corn and rye in feeding, thereby creating the potential for additional wheat exports. Projected feed and residual use is up in Canada by 0.2 million tons, reflecting increased wheat availability. In Egypt and Korea, wheat feeding is also up 0.2 million tons, each, with higher projected imports of low quality wheat. Wheat feed use is trimmed 0.1 million tons in Kazakhstan as a result of a consumption series revision. Reflecting higher projected wheat imports, food use is projected higher in Bangladesh and Syria, up 0.2 million tons each, and by a slight amount in Azerbaijan.
World Wheat Ending Stocks Prospects Up 2.4 Percent This Month
World wheat ending stocks for 2013/14 are projected to reach 182.8 million tons, up 4.3 million this month. However, although this stocks figure is about 7.0 million tons higher compared to a year earlier, the projected ending-stocks-to-use ratio is still under 26 percent, on par with the last year, and the lowest since 2007/08. Increased 2013/14 wheat production prospects are boosting ending stocks this month for Canada, up 2.6 million tons to 9.9 million, the highest level in 20 years; and for Australia, up 1.0 million tons to 4.8 million. With higher projected imports, wheat ending stocks are projected higher 0.3 million tons for both Egypt (where stocks are still the lowest in 6 years) and Mexico. Projected ending stocks are also up 0.3 million tons for the United States, reflecting higher wheat import prospects from Canada. Smaller offsetting changes in wheat ending stocks are projected for Azerbaijan, Bangladesh, the EU, Kazakhstan, and South Africa.
World Wheat Trade Breaks the Record
Projected world wheat trade for the international 2013/14 July-June trade year is further increased this month by 2.2 million tons, to a record 154.3 million. This surpasses the previous record of 2011/12 by 0.5 million tons. A substantial increase in projected wheat supplies of major wheat-producing and -exporting countries puts further downward pressure on wheat prices. Wheat-importing countries are taking advantage of this opportunity to import and use more competitively priced, lower quality wheat. Wheat imports are projected higher this month for Egypt, up 0.5 million tons to 10.0 million. The higher pace of wheat purchases and recent General Authority for Supply Commodities (GASC) tenders give an indication that the country is on the way to import wheat quantities that are closer to its usual (before the political crisis) level of imports. In the last tumultuous year when the Egyptian pound was devalued vis-à-vis the US dollar by almost 20 percent, thereby increasing prices for imports, Egypt imported just 8.3 million tons of wheat. This year the Egyptian economy and import potential is expected to be supported by sizeable financial assistance pledged by Saudi Arabia, United Arab Emirates (UAE), and Kuwait.
