Wheat-Fewer Acres in 2017-18, But Still Third Largest Crop Ever01/30/2017
USDA will issue its first 2017/18 world wheat supply and demand estimates in May, but on Jan. 19 the International Grains Council (IGC) provided an early look ahead at the next marketing year. IGC pegged 2017/18 world wheat production at 735 million metric tons (MMT), down 2 percent from the estimated 752 MMT produced in 2016/17.
If realized, it would still be the third largest wheat crop ever, but would be the first year over year decline in 5 years. For comparison, USDA estimates 2016/17 global wheat production at 753 MMT.
IGC expects just two of the major exporting countries, Russia and Ukraine, to harvest more wheat in 2017/18, even though their estimates are up only 1 percent and 2 percent, respectively. IGC predicts European Union harvested area will remain stable in 2017/18. Harvested area is forecasted to fall 3 percent in Argentina, Australia and Canada, while IGC expects farmers in the United States and Kazakhstan to harvest 8 percent and 10 percent less wheat, respectively.
Harvested area in Morocco is expected to rebound to a more normal level after widespread rain eased drought conditions that cut its 2016/17 harvested area by 26 percent in 2016/17 to just 5.19 million acres (2.1 million hectares). Projected increases in India, North Africa, Turkey, Iran and Egypt will offset the expected decreases in harvested area among the major exporters according to IGC data.
2017/18 carry-in stocks are estimated at a record large 235 MMT, up 6 percent year over year, if realized. However, the larger carry-in stocks are not anticipated to offset the forecasted decrease in production, and total world supply would decline 3 MMT to a projected 970 MMT.
For the first time since 2012/13, IGC expects total consumption to be greater than total production. Total consumption is forecast at 737 MMT, down an estimated 1 MMT from 2016/17. Food use will climb over 500 MMT for the first time ever, partially offsetting an expected decrease in feed and residual use due to smaller production in Canada and the United States.
IGC believes 2016/17 world wheat trade will shrink to 164 MMT, down 4 percent from the prior year, if realized. With consumption outpacing production, IGC expects carryout stocks to decrease marginally year over year to 234 MMT.
Source: Stephanie Bryant-Erdmann, AgFax