The long-term trend in the wheat market is a global decline in stocks

Global wheat consumption is forecast at 804 million tonnes in 2023-24, an increase of nine million tonnes over last year. Meanwhile, production is estimated to have fallen to 787 million tonnes, a seven million tonne decline. That will cause a 17 million tonne decline in world ending stocks.

“This year we expect to see the largest decrease in world ending stocks since 2012,” said Corey Mamchuk, a wheat trader with Cargill.

The gap between supply and demand will be exaggerated this year because of smaller harvests in Canada, Russia and Australia, but it highlights an emerging pattern.

“The longer-term trend on wheat is that consumption has been growing faster than production,” he told international buyers attending Cereals Canada’s 2023 New Crop Wheat Report webinar.

“Globally, we add about 10 million tonnes of wheat per year, but demand increases by 11 million tonnes per year.”

World wheat-ending stocks are still forecast at a robust 264 million tonnes but stocks among major exporters are estimated at 58 million tonnes, a seven million tonne drop.

Ending stocks are even tighter for durum. They are forecast at 4.9 million tonnes, down 32 percent year-on-year. Stocks among major exporters is forecast at a paltry two million tonnes.

That is due primarily to Canada’s disappointing crop.

Global consumption of the crop is forecast to outstrip demand by 2.4 million tonnes in 2023-24.

Mamchuk said durum ending stocks have been on a downward slide for five years in a row.

Canada is expected to account for 12 percent of world wheat exports in 2023-24 and 41 percent of durum trade.

About half of the country’s non-durum wheat exports go to Asia, with China, Indonesia and Japan being the top-three markets.

The Mediterranean basin accounts for more than half of Canada’s durum exports, with Italy, Morocco and Algeria consistently being the top-three markets.

Canada’s non-durum wheat exports are forecast at 18 million tonnes in 2023-24, a 13 percent drop from last year.

Durum shipments are forecast at 3.3 million tonnes, a 35 percent decline.

The good news for buyers is that Canada had excellent quality in 2023 with over 95 percent of Canadian Western red spring grading No. 1 and No. 2 and over 80 percent of Canadian Western amber durum making the top two grades.

Average protein content for the CWRS wheat crop was 13.8 percent, which is similar to the 10-year average of 13.7 percent.

Mamchuk told buyers that Cereals Canada has a new tool that allows them to follow the growing season from seeding through harvest.

The Growing Season Progress Report provides them with summaries of crop reports from provincial governments in Manitoba, Saskatchewan and Alberta that are updated every two weeks.

Tags: wheat, stocks, supply and demand balance, crop forecast, Canada