SUGAR: Mexico production for 2023/24 is projected at 5.016 million metric tons (MT), a decrease of 267,000 from last month and also 208,248 lower than last year. Analysis of the severity of drought conditions in municipalities where sugar processing plants are located indicates far worse conditions than last year and more comparable to that experienced in the low production year of 2019/20.
Higher fertilizer application rates than the 2022/23 low levels are considered unlikely to improve sugarcane yields relative to those of last year. Although the campaign is still in its early stages, to-date levels of sugar yields and recovery rates are more than 3.5 standard deviations below the averages for the previous 10 years. Although some recovery will take place, applying the largest over-the-week increases since 2017/18 for recovery for each of this year’s remaining weeks produces a recovery rate of 10.65 percent.
Applying this rate to area harvested at the CONADESUCA-estimated level of 798,286 hectares and slightly higher yield of 59.00 MT/hectare produces the current WASDE projection. The production of low polarity sugar for export to the United States is projected at 11.8 percent of total production (the same rate estimated by CONADESUCA). Assuming that all of this sugar is exported to the U.S. market, and like last year, constitutes 75 percent of the total exported, exports to the United States are projected at 789,080 MT.
Exports to other countries are unchanged at 25,000 MT and total exports at 814,080 MT are down 42,002 from last month. Deliveries and ending stocks are unchanged and imports are residually projected at 510,867 MT, up 224,998 over last month.
U.S. sugar supply for 2023/24 is increased by 189,687 short tons, raw value (STRV) on increases in production and imports. Louisiana cane sugar production for the crop year is increased 104,374 STRV to 1.850 million on industry reporting. Fiscal year production is projected at 1.904 million STRV adding in projected production for 2024 September (59,183 STRV) and subtracting out 2023 September (5,623 STRV). Beet sugar production is projected 43,860 STRV higher at 5.407 million on higher projected recovery only partially offset by lower NASS estimated sugarbeet production. Imports are projected 54,032 STRV higher at 3.310 million. Although imports from Mexico and FTA TRQs are down a combined 55,968 STRV, high tier tariff imports are increased 110,000 STRV to 575,000 on the pace of entries of high duty raw sugar. Based on both U.S. Census and Customs and Border Protection data, USDA estimates high duty raw sugar imports entered as of January 10 at 169,174 STRV. The raw sugar component of the total entries is increased to 400,000 STRV, implying that 42.3 percent has already entered. The refined sugar component is unchanged at 175,000 STRV. Sugar exports are increased by 60,000 STRV to 160,000 on the pace to date. Most of this sugar is destined for Mexico. Deliveries are unchanged. Ending stocks are residually projected at 1.754 million STRV for an ending stocks-to-use ratio of 13.7 percent.
WHEAT: Projected 2023/24 U.S. wheat ending stocks are lowered 11 million bushels on decreased supplies that more than offset less use. June 1 beginning stocks are reduced based on the NASS Grain Stocks report. Seed use is reduced 1 million bushels to 64 million. All wheat feed and residual use for 2023/24 is unchanged and reflects disappearance for June-November as indicated by the December 1 and revised September 1 stocks released in the NASS Grain Stocks report; however, there are offsetting by-class changes to feed and residual use. The 2023/24 season-average farm price is forecast $0.10 per bushel lower at $7.20, based on prices received to date and expectations for futures and cash prices for the remainder of 2023/24.
The global wheat outlook for 2023/24 is for larger supplies, consumption, trade, and ending stocks compared with last month. Global supplies are raised 3.6 million tons to 1,056.5 million on higher beginning stocks and production. The increase in global beginning stocks is primarily the result of revisions for Ukraine, where beginning stocks are raised 2.2 million tons to 3.5 million on downward revisions to feed and residual use estimates since 2021/22. Production is changed in several countries based mostly on updated government estimates, with increases for Russia, Ukraine, and Saudi Arabia more than offsetting a decrease for China. Global consumption is raised 1.8 million tons to 796.5 million, mainly on higher feed and residual use for India and the EU. Consumption for India is raised by 1.3 million tons based on greater implied use from the latest government-held stocks reported by the Food Corporation of India. EU wheat consumption is boosted based on larger projected imports from Ukraine, partially offsetting reduced use of feed grains. World trade is raised 2.4 million tons to 209.5 million on higher exports by Ukraine, Russia, Australia, and Canada that more than offset a decrease for the EU. Exports for Ukraine are raised 1.5 million tons to 14.0 million but are still below last year. Projected 2023/24 ending stocks are raised 1.8 million tons to 260.0 million primarily on increases for the EU and Ukraine.