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OSU's Kim Anderson says June WASDE and Crop Production Reports should not Impact U.S. Wheat Prices
Fri, 10 Jun 2022 14:23:11 CDT
The following is an analysis of the June WASDE and Crop Production Report by OSU Crop Marketing Specialist, Dr. Kim Anderson:
"I don't see anything in the reports that will impact U.S. wheat prices," Anderson said. "From a production standpoint, U.S. 2022 winter wheat production was estimated to be 1.174 billion bushels compared 1.277 billion bushels in 2021."
Anderson said 2022 U.S. wheat production was projected to be 1.74 billion bushels compared to 1.65 billion in 2021.
"Hard red winter wheat production was essentially unchanged (590 million bushels in May and 582 million for 2022)," Anderson said. "Oklahoma wheat production was increased from 60 million bushels to 64.8 million bushels, Kansas production was unchanged, and Texas production was lowered 1.3 million bushels."
The 2022-2023 wheat marketing world wheat production and ending stocks were essentially unchanged, Anderson said.
"The major drivers of wheat price will be what happens with Ukraine and Russia and world wheat production," Anderson said. "Russian wheat production is projected to increase from 2.8 billion bushels in 2021 to 3.0 billion bushels in 2022. Russian wheat exports are projected to increase from 1.2 billion bushels in 2021 through 2022 to 1.5 billion bushels during 2022 through 2023."
Ukraine wheat production is projected to decline from 1.2 billion bushels in 2021 to 790 million bushels in 2022, Anderson said, and Ukraine's wheat exports are projected to decline from 700 million bushels to 370 million bushels.
"Even if Russia agreed to open the Black Sea for wheat exports, it would take months to clear the mines and obstructions that prevent safe ship movements," Anderson said.
Anderson said given that world wheat stocks are relatively tight and there is a fear of "food shortages," wheat prices are expected to react to any negative changes in world wheat production. Increased changes in production expectations are not expected to create as much downside pressure as reduced production expectations will have on upside price movements, he added
If by some miracle Russian opens the Black Sea, Anderson warns that he would expect a relatively quick $2 reduction in wheat prices.
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