Article
The USDA marginally lowered 2022/23 global wheat and maize production estimates, while lifting soybeans
Published: 15/12/2022
This past week the United States Department of Agriculture (USDA) released its monthly flagship report, the World Agricultural Supply and Demand Estimates report. This report provides insight into the production conditions of the major grains and oilseeds.
This past week the United States Department of Agriculture (USDA) released its monthly flagship report, the World Agricultural Supply and Demand Estimates report. This report provides insight into the production conditions of the major grains and oilseeds.
While there have been some changes in production conditions in various countries, the overall estimates continue to paint a broadly positive picture, with slight downward revisions in maize and wheat harvests. For example, the USDA forecasts 2022/23 global wheat production at 780 million tonnes, down by 0,3% from November 2022. This is mainly on the back of a downward revision of Argentina’s 2022/23 wheat crop on the back of drier weather conditions. Still, the 2022/23 wheat production forecast is 0,2% higher than the previous season supported by expected large yields in Russia, the US, Canada, Kazakhstan, China, Turkey, and the UK, amongst others.
Moreover, the USDA forecasts 2022/23 global maize harvest at 1,16 billion tonnes, down by 1% from the previous month, mainly on expectations of a lower crop in the Black Sea region. This is down by 5% from the previous season, mainly due to an expected smaller crop in the US, Ukraine, EU, and India. Moreover, the 2022/23 global rice production is estimated at 503 million tonnes, marginally down by a tonne from November estimates. The current estimate is down by 2% from the 2021/22 season due to anticipated poor yields in parts of rice-producing regions of Asia.
Unlike the other crops, the 2022/23 soybeans production prospects remain positive, at 391 million tonnes. This is slightly up from November figures and 10% higher than the 2021/22 season. The anticipated large harvest in Brazil, Argentina, China, Paraguay, Canada, Russia, and Ukraine compensates for the expected decline in the US, India, and Uruguay. These deviations in crop expectations are a function of weather and area plantings variations.
As we stated in our previous notes, the 2022/2023 global grains and oilseeds season presents an encouraging picture of supplies. These forecasts will probably be sufficient to provide relief from the levels the grains and oilseeds prices were at in the weeks after the start of the Russia-Ukraine war.
Still, one will have to keep a close eye on the South American crop conditions over the coming months as the season is still at inception, and there are growing fears of drought because of the La Niña weather event. We will also keep monitoring the impact of these developments on food prices (see Exhibit 1).