USDA forecasts lowest wheat carryover in seven years

WASHINGTON, DC, US – The US Department of Agriculture on May 12, in its initial wheat supply-and-demand forecasts for 2021-22 as presented in the May World Agricultural Supply and Demand Estimates report, projected the carryover of wheat on June 1, 2022, at 774 million bushels, down 98 million bushels, or 11%, from an upwardly revised 872 million bushels forecast for 2021 and compared with 1.028 billion bushels in 2000. If the forecast is realized, the 2022 carryover would be the lowest in seven years. The average of pre-report trade estimates for the 2022 carryover was 730 million bushels.

The carry-in supply for 2021-22 (equating to the 2021 carryover) was raised 20 million bushels from the April outlook as the USDA lowered its forecast for 2020-21 wheat exports by 20 million bushels, to 965 million, and its forecast for food use of wheat in 2020-21 by 5 million bushels, to 960 million bushels. The lower use forecasts more than offset a lower projection for 2020-21 wheat imports at 105 million bushels, down 5 million from April.

The outlook for 2021-22 included a 2021 wheat production forecast at 1.872 billion bushels, up 46 million bushels, or 3%, from 1.826 billion bushels in 2020 and compared with 1.932 billion bushels in 2019. The production forecast incorporated the first survey-based winter wheat production projection of the season at 1.283 billion bushels. This inferred a spring wheat, including durum, outturn in 2021 at 589 million bushels. The spring wheat outlook was based on a planted area as presented in the Prospective

Plantings report issued on March 31 along with average abandonment and trendline yields.
The USDA forecast 2021-22 wheat imports at 125 million bushels, up 20 million bushels from 105 million bushels in 2020-21. Total wheat supply in 2021-22 was projected at 2.869 billion bushels, down 90 million bushels, or 3%, from 2.959 billion bushels in 2020-21 and compared with 3.117 billion bushels in 2019-20.

The USDA projected wheat disappearance in 2021-22 at 2.095 billion bushels, up 7 million bushels from the forecast 20.088 billion in 2020-21 and compared with 2.089 billion bushels in 2019-20.

Domestic use of wheat in 2021-22 was projected at 1.195 billion bushels, up 72 million bushels, or 6%, from 1.123 billion bushels in both 2020-21 and 2019-20. The USDA forecast food use of wheat in 2021-22 at 963 million bushels versus 960 million bushels as the projection for the current year. Seed use of wheat was projected at 62 million bushels compared with 63 million bushels in 2020-21. Feed and residual use of wheat in 2021-22 was projected at 170 million bushels, up 70 million bushels, or 70%, from 100 million bushels in 2020-21. The USDA in commentary accompanying the report said, “A reduced wheat-corn price spread is expected to raise wheat feeding in the June-August quarter with annual feed and residual use projected at 170 million bushels, the highest since 2013-14.”

The USDA forecast 2021-22 wheat exports at 900 million bushels, down 65 million bushels, or 7%, from 965 million bushels as projected for 2020-21.

“Several major exporters are projected to have larger supplies in 2021-22, and relatively high US prices are expected to reduce US competitiveness,” the USDA said.

The USDA projected the average farm price of wheat in 2021-22 at $6.50 a bushel compared with $5.05 a bushel in 2020-21 and $4.58 a bushel in 2019-20.

Source: World Grain