SUGAR: Mexico production for 2022/23 is estimated at 5.230 million metric tons (MT), down 155,000 from last month on a low sugarcane yield below 60.0 MT/hectare (3.2 standard deviations below the preceding 9-year average) and sucrose recovery below 11.0 percent (0.9 standard deviations below).
There are 10 factories operating as of May 27 and most are expected to end their season soon. Half of the supply reduction is expected to lower deliveries to the IMMEX re-export program to 272,500 MT, of which 247,500 is expected from domestic production and 25,000 from imports. At this point import data from Mexico show imports through March only at 10,867 MT while other countries reported exports to Mexico are at 25,772 MT. The current 25,000 MT estimate for imports is based on imports reported for 2021/22 but it should be noted that the preceding 5-year average was 50,742 MT with 82,287 MT supplied by non-USMCA countries in 2017/18.
The other half of the supply reduction is expected to lower exports by 67,917 MT to 1.002 million and ending stocks by 9,583 MT to 879,523.
CONADESUCA reports exports not under license to the United States to date at 18,291 MT, implying that exports to the United States are down 77,921 from last month to 984,096 MT. Raw sugar with a polarity of less than 99.2 percent is estimated at about 74 percent of this amount (that is, 728,231 MT). Mexico production for 2023/24 at 5.900 million MT is unchanged from last month. Deliveries for IMMEX are projected at 450,000 MT, a reduction of 50,000 from last month and close to the average level between 2017/18 and 2021/22.
Exports are residually projected up 50,000 MT to 1.348 million. All exports are projected to go to the United States under license. U.S. beet sugar production for 2022/23 is projected at 5.171 million short tons, raw value (STRV), an increase of 15,375 on higher sucrose recovery from sliced beets. Imports are projected at 3.380 million STRV, a decrease of 66,046 on a 91,046-STRV decline in sugar expected from Mexico partially offset by a 25,000-STRV increase in high-tier tariff imports. With no change in use, these changes flow through to a reduction in ending stocks by 50,671 STRV.
The ending stocks-to-use ratio is estimated at 13.13 percent, down from 13.53 last month. U.S. sugar supply for 2023/24 is projected lower than last month by 90,749 STRV on lower beginning stocks and production partially offset by an increase in imports. Beet sugar production is down by 11,468 STRV on a higher shrink projected by processors, and cane sugar is down by 87,032 STRV on processors’ projections in Florida and Texas.
Imports from Mexico are increased by 58,422 STRV. There has been no USDA announcement on the additional specialty sugar TRQ for 2023/24. There is no change in use and stocks are lowered by the change in supply to 1.353 million STRV for an ending stocks-to-use ratio of 10.56 percent, down from 11.26 percent last month.
WHEAT: The outlook for 2023/24 U.S. wheat this month is for larger supplies, unchanged domestic use and exports, and higher stocks. Supplies are raised as all wheat production is projected at 1,665 million bushels, up 6 million from last month on higher Hard Red Winter production more than offsetting reductions in Soft Red Winter and White Winter.
The all wheat yield is 44.9 bushels per acre, up 0.2 bushels from last month but remaining below last year. Total use is unchanged with all of the production increase added to ending stocks, now projected at 562 million bushels. The 2023/24 season-average farm price is lowered $0.30 per bushel to $7.70 on larger U.S. and foreign wheat supplies.
The global wheat outlook for 2023/24 is for larger supplies, higher consumption, increased trade, and larger stocks. Supplies are projected to increase 10.8 million tons to 1,066.9 million, primarily on larger production for Russia, India, the EU, and Ukraine.
Russia is raised 3.5 million tons to 85.0 million, all for winter wheat, on generally favorable conditions after abundant spring precipitation. India is increased 3.5 million tons to 113.5 million, mainly on the government’s third Advanced Estimate. The EU is raised 1.5 million tons to 140.5 million on continued favorable winter wheat conditions for most of the EU member countries.
Ukraine is increased 1.0 million tons to 17.5 million on favorable weather conditions in southern Ukraine but production remains below last year on reduced harvested area.
Global consumption is increased 4.4 million tons to 796.1 million, mainly on higher feed and residual use for China, Russia, and India. The heavy rains in China’s Henan province during winter wheat harvest is expected to result in larger supplies of feed-quality wheat as China’s feed and residual is raised 2.0 million tons to 34.0 million.
World trade is raised 2.9 million tons to 212.6 million, on increased exports by Russia, the EU, India, and Ukraine. Projected 2023/24 global ending stocks are raised 6.4 million tons to 270.7 million, largely on increases for India, Russia, and the EU.