The USDA released the May WASDE (World Agriculture Supply and Demand Estimates), which contained the first estimates for the 2023/24 wheat marketing year. Also released were the 2023 wheat production estimates. After the reports were released, Oklahoma wheat prices increased 35 cents.
The Pond Creek Oklahoma harvest wheat price ended the day at $8.37. The Perryton, Texas wheat price was $8.47, and the Snyder, Oklahoma price was $8.07.
Oklahoma’s wheat production was estimated to be 49.5 million bushels (Mb) compared to 69 Mb in 2022 and a 10-year average of 95 Mb. 2023 Oklahoma wheat production is the lowest since 2014’s 47.6 Mb.
U.S. hard red winter wheat production was estimated to be 514 Mb compared to 531 in 2022 and a 10-year average of 806 Mb.
All 2023 U.S. wheat production was projected to be 1.659 billion bushels (Bb) compared to 2022 wheat production of 1.650 Bb. USDA’s production estimate was 130 Mb below the trade’s prerelease estimate.
U.S. 2023/24 wheat ending stocks were projected to be 556 Mb compared to 598 Mb for the 2022/23 marketing year.
World wheat 2023/24 wheat marketing-year production was estimated to be 29 Bb compared to 28.96 Bb in 2022/23. 2023/24 world wheat ending stocks are projected to be 9.784 Bb compared to 9.783 Bb for 2022/23.
The USDA reports for U.S. wheat were obviously a surprise to the market. Irrespective of the final U.S. wheat production, U.S. wheat stocks will remain relatively tight, and that will tend to support Oklahoma wheat prices, at least in the short term.
The biggest long-term price determinant is world wheat production and demand. The WASDE report projected little change in the world’s wheat supply and demand situation.
Today’s reports indicate that there may be more upside price potential than downside price risk. We will know the world’s 2023 wheat production in January 2024 when the 2023 world wheat crop is in the bin.
