SUGAR: U.S. 2022/23 sugar ending stocks are increased by 161,933 short tons, raw value (STRV) on increases in imports, beginning stocks, and production. On September 15, the USDA established the fiscal year (FY) 2022/23 refined sugar TRQ at 220,000 metric tons, raw value (MTRV), and on September 19 USTR allocated the in-quota quantity of the TRQ among supplying countries.
USDA’s action results in an increase in 2022/23 TRQ imports of 217,206 STRV. Added to this amount are imports amounting to 77,437 STRV from the 2021/22 raw sugar TRQ that did not enter in September as forecast but are forecast to enter in 2022/23 after USDA extended the period for entry until December 31, 2022. Arrayed against these increases is an increase in the raw sugar TRQ shortfall by 155,424 STRV to 254,632, due mostly to the decision of officials in the Philippines to allocate all production to domestic consumption and reduce exports to zero.
Also, sugar imported under calendar year FTA TRQs are reduced by 10,201 STRV mostly because that sugar entered earlier in 2021/22 than originally forecast. The net effect of beginning stocks on the 2022/23 supply and use balance results from stronger-than-expected Louisiana cane sugar production in September and from increases in 2021/22 high-tier tariff imports and imports from Mexico.
Based on NASS sugar crop yield changes in the October Crop Production report, 2022/23 cane sugar production in Louisiana is increased and more than offsets a small reduction in beet sugar production. Texas cane sugar is reduced on processor reporting. The 2022/23 ending stocks-to-use ratio is projected at 14.8 percent, up from 13.5 last month.
Mexico sugar production for 2022/23 is reduced 100,000 MT to 5.900 million. Area harvested is expected to remain above 800,000 hectares for a second consecutive year as good domestic returns in 2021/22 have incentivized growers to maintain area planted to sugarcane. Nonetheless, yields are expected to be lower than last year due to lower rainfall in certain growing areas, higher prices for fertilizers and other inputs, and some field labor shortages. Lower production is matched by lower exports on a one-to-one basis. Total exports forecast at 1.403 million MT only slightly exceed exports of 1.385 million projected for shipment under export license to the United States.
WHEAT: The outlook for 2022/23 U.S. wheat this month is for lower supplies, domestic use, exports, and stocks. Supplies are reduced on lower 2022/23 production based on the NASS Small Grains Summary that indicated reductions in both harvested area and yield.
This lowered production by 133 million bushels to 1,650 million, leaving production only minimally higher than last year. Partially offsetting the production decline are higher projected imports, raised 10 million bushels to 120 million, all for Hard Red Spring.
Annual feed and residual use is lowered 30 million bushels to 50 million, based on first quarter disappearance, as indicated in the NASS Grain Stocks report. This is the lowest first quarter total disappearance since 1983/84.
Wheat exports are lowered 50 million bushels to 775 million on reduced supplies, slow pace of export sales, and continued uncompetitive U.S. export prices. This would be the lowest U.S. wheat exports since 1971/72. Projected ending stocks are lowered 34 million bushels to 576 million, which would be the lowest since 2007/08. The season-average farm price is raised $0.20 per bushel to $9.20 on reported NASS prices to date and expectations for futures and cash prices for the remainder of 2022/23.
The global wheat outlook for 2022/23 wheat is for reduced supplies, consumption, trade, and stocks. Supplies are lowered 1.9 million tons to 1,057.7 million on reduced production for the United States and Argentina more than offsetting higher EU production although world production remains at a record. Argentina is lowered 1.5 million tons to 17.5 million with reductions in both area harvested and yield on continued widespread dry conditions. EU production is raised 2.7 million tons to 134.8 million, mainly on higher government estimates from Poland and Germany.
Global consumption is reduced 0.9 million tons to 790.2 million on lower food, seed, and industrial use more than offsetting higher feed and residual use. World trade is lowered 0.6 million tons to 208.3 million on reduced exports by the United States and Argentina more than offsetting higher EU exports. Projected 2022/23 ending stocks are lowered 1.0 million tons to 267.5 million mostly on a reduction for the United States.
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