USDA ups wheat stock forecast amid EU export drop & trade tensions
The US Department of Agriculture (USDA) has raised its forecast for global wheat stocks in the 2024-25 season. According to the latest WASDE report, the main reason for this adjustment is larger wheat harvests in Australia, Argentina, and Ukraine.
Global wheat production has been increased by 3.4 million tons to 797.2 million tons.
- Australia’s wheat production has been revised up by 2.1 million tons to 34.1 million tons, making it the country’s third-largest wheat harvest ever.
- Argentina’s wheat harvest is now estimated at 18.5 million tons, 0.8 million tons more than previously expected in February.
- Ukraine’s wheat production is projected at 23.4 million tons, an increase of 0.5 million tons.
Additionally, higher beginning stocks, such as those in Turkey, have contributed to the overall increase in wheat supply.
EU exports drop by around 30%
Global wheat trade is estimated to be 0.9 million tons lower, at 208.1 million tons. This decline is mainly due to reduced exports from the EU, Russia, and the US. The EU’s wheat exports for the current season are projected at 27 million tons, the lowest level since 2018-19. According to the USDA, EU exports have dropped by about 30% compared to the previous year. The primary reason for this decline is the poor harvest in France, the EU’s largest wheat producer. However, other EU countries such as Romania and Bulgaria have increased their share of EU exports.
The USDA expects global wheat trade to decline. This estimate does not yet factor in US tariffs on Canadian and Mexican products, as these have been suspended for most agricultural products until April 2.
Tariffs imposed by China
The latest forecast does account for US tariffs on Chinese products and China’s retaliatory tariffs on the US. Due to China’s import duties, the US now faces a 15% tariff on wheat, corn, and poultry exports, as well as a 10% tariff on soybeans, pork, beef, and fruit.
The USDA has lowered its wheat export forecast for the US and also expects China to import 1.5 million tons less wheat. China’s wheat import estimate has been revised down to 6.5 million tons, which is less than half of its imports in 2023-24.
Global wheat consumption is expected to increase by 2.9 million tons to 806.7 million tons. Despite this, the global wheat ending stock for 2024-25 is projected to rise by 2.5 million tons to 260.1 million tons. While this is higher than the February forecast, it remains the lowest global ending stock since 2016-17.
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