CHICAGO – US wheat supplies will be bigger than previously expected as exporters have failed to gain new export business even as fighting between Ukraine and Russia disrupts shipments from the Black Sea region, the government said according to Reuters.
Importing nations initially expected to have to find alternative supplies after Russia invaded Ukraine in late February but Russia’s exports have picked up pace recently. Russia calls its actions in Ukraine a “special operation.”
The US Agriculture Department lowered its outlook for Ukraine’s wheat exports by 1 million tonnes to 19 million, and boosted its forecast for Russia’s wheat exports by 1 million to 33 million tonnes. Together, the two countries are forecast to account for about 26% of global wheat exports.
Before the war, USDA had forecast that the two countries’ combined wheat exports would total 59 million tonnes.
USDA left its outlook for domestic corn supplies unchanged in its monthly report, with US exports in line with the March forecast.
Wheat and corn futures at the Chicago Board of Trade pared their gains immediately after the report was released before surging to fresh session highs.
“The way the market is reacting tells me that they think there’s more news to come, particularly more tightening of stocks,” said Bob Utterback, president of Utterback Marketing. “I don’t think USDA has fully factored in the Ukraine crop into this report.”
US wheat ending stocks for the 2021/22 marketing year that ends May 31 were pegged at 678 million bushels, up 25 million from a month earlier. USDA lowered its US export outlook by 15 million bushels and cut usage from the feed and residual sector by 10 million.
Global wheat stocks were cut to a five-year low of 278.42 million tonnes.
