SUGAR: U.S. sugar supply in 2022/23 is virtually unchanged from last month as projected changes in production are counterbalanced by projected imports of sugar from Mexico in accordance with the terms of the CVD Suspension Agreements. Beet sugar production is lowered 66,980 short tons, raw value (STRV) to 4.927 million. Beet processors reduced their forecast of sugarbeets available for slicing by 252,846 tons in their December forecast published in Sweetener Market Data. An increase in cane sugar production partially offsets the beet sugar decline. Cane sugar production in Louisiana is increased by 18,460 STRV to 2.025 million. Although NASS decreased its sugarcane yield to 32.2 tons/acre from 32.4, production is increased on more cane area for sugar instead of for seed and a 1.01 percent increase in recovery projected by processors. Cane sugar in Texas is increased slightly on processor reporting.
Imports from Mexico are projected based on fulfilling U.S. Needs according to components from this December WASDE which will be used by the Department of Commerce in establishing the Export Limit as of January 1, 2023. There are no changes to use. Ending stocks are residually projected at 1.707 million STRV for an ending stocks-to-use ratio of 13.5 percent, virtually unchanged from last month. On November 23, Customs and Border Protection (CBP) issued a Withhold Release Order (WRO) against Central Romana Corporation in the Dominican Republic (DR) on alleged use of forced labor and other factors. The WRO prohibits entry into the United States of raw sugar and sugar-based products produced by the company. The USDA has determined that the DR sugar industry intends to re-configure distribution in the local sugar market and rearrange the company level allotments of the TRQ with the local mills to meet its full 2022/23 raw sugar TRQ allocation.
USDA projects Mexico sugar production for 2022/23 the same as last month at 5.900 million metric tons (MT). CONADESUCA released its 2022/23 forecast of 6.026 million MT in November. The USDA adopts CONADESUCA projected sugarcane yield of 64.06 MT/hectare and recovery of 11.30 percent, but projects area harvested only at 814,850 hectares, up about 15,000 hectares from last month but less than CONADESUCA’s forecast of 832,245. Exports are projected at 1.266 million MT and almost all (barring a small amount exported in October) is intended for the U.S. market under export license. Ending stocks are WASDE-631-4 projected at a level covering 2023/24 use for 2.5 months prior to next season’s campaign. Shipments to IMMEX are reduced by 38,886 MT to 494,114 to accommodate exports to the U.S. market.
WHEAT: This month’s 2022/23 U.S. wheat supply and use outlook is unchanged from last month. There are offsetting changes for exports by-class with Hard Red Spring and White higher and Soft Red Winter lower. The 2022/23 season-average farm price is forecast $0.10 per bushel lower at $9.10, based on prices received 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, lower consumption, increased trade, and reduced stocks. Supplies are lowered 2.1 million tons to 1,056.9 million on reduced production for Argentina and Canada that is only partly offset by higher Australia production. Argentina is lowered 3.0 million tons to 12.5 million with reductions in both area harvested and yield on continued widespread dry conditions. This would be the lowest production since 2015/16.
Canada’s production is reduced 1.2 million tons to 33.8 million, based on the latest Statistics Canada estimate and is the third largest crop on record. Australia’s production is raised 2.1 million tons to a record 36.6 million, based on the latest Australian Bureau of Agricultural and Resource Economics (ABARES) forecast. Global consumption is reduced 1.6 million tons to 789.5 million, mainly on lower feed and residual use by the EU and Ukraine. World trade is raised 2.2 million tons to 210.9 million on higher exports by Australia, Ukraine, the EU, and Russia more than offsetting reduced exports by Argentina. Australia exports are raised 1.5 million tons to a near-record 27.5 million. Because of excessive rains in New South Wales at harvest, Australia’s feed wheat supplies are expected to be greater for 2022/23 and competitively priced against feed grains for East Asian importers. This resulted in higher imports for South Korea and several Southeast Asian countries this month. Ukraine exports are increased 1.5 million tons to 12.5 million. Argentina’s exports are reduced 2.5 million tons to 7.5 million with lower exportable supplies. This would be Argentina’s lowest exports since 2014/15. Projected 2022/23 ending stocks are decreased 0.5 million tons to 267.3 million as reductions for Russia, Canada, Argentina, and Ukraine more than offset increases for the EU and Australia.