SUGAR: Mexico production for 2023/24 is projected at 4.747 million metric tons (MT), a decrease of 127,518 from last month and also 476,766 lower than last year. The sugarcane harvest in Mexico continues to lag at levels unprecedented in recent times.
All relevant production parameters (yields and recovery) through March 2 are several deviations below 10-year averages with no improvement being seen as time advances. Interim analysis based on the latest CONADESUCA data implies a full-season national sugarcane yield of 61.9 MT/hectare which is lower than last month and sucrose recovery of 9.97 percent, also lower than last month and at a record low.
Eastern growing regions less affected by drought, like in the Northeast and Pacific regions, have had unexpectedly low sucrose recovery levels, likely due to the high cost of fertilizers for a second year in a row. At this point, harvested area presents the most uncertainty as many fields may not yield enough sugarcane to be worth harvesting. The pace of harvested area will be closely monitored each succeeding harvest week.
The production of low polarity sugar for export to the United States is projected at 9.0 percent of total production. Most low polarity sugar is produced in the eastern regions with low sucrose recovery. Some analysis suggests a switching from the production of low polarity sugar to estandar sugar that commands a higher price in the domestic market. Assuming that all projected low polarity 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 569,698 MT. Exports to other countries are unchanged at 25,000 MT and total exports at 594,698 MT are down 114,054 from last month. Deliveries are decreased by 55,217 MT to 4.593 million on the pace to date and imports are residually projected at 494,098 MT, down 52,440 from last month.
U.S. sugar production for 2023/24 is decreased by 109,050 short tons, raw value (STRV) on lower beet sugar production only partially offset by increases in cane sugar production. Beet sugar production is down 155,761 STRV on higher beet pile shrink mostly due to warmer-than-average temperatures in the Red River Valley and Michigan and on lower sucrose recovery reported in aggregate by beet processors. Cane sugar production is projected higher by 46,711 STRV on higher production in Florida mostly offsetting a small reduction in Texas. USDA increased the raw sugar TRQ by 137,789 STRV citing the authority given to the Secretary of Agriculture under the Additional U.S. Note 5 of HTS Chapter 17 instead of the more usual legislative authority granted by the U.S. Congress.
This increase is mostly offset by reduced imports from Mexico. There is no change to high-tier tariff imports: they remain at a record 715,000 STRV. There were no changes to use. Ending stocks are residually projected at 1.701 million for an ending stocks-to-use ratio of 13.38 percent, down from 14.20 last month.
WHEAT: The outlook for 2023/24 U.S. wheat this month is for unchanged supplies and domestic use, lower exports, and higher ending stocks. Exports are reduced 15 million bushels to 710 million with reductions for Soft Red Winter and Hard Red Winter. Ending stocks are raised by an equivalent amount to 673 million bushels and are 18 percent higher than last year. The season-average farm price is reduced $0.05 per bushel to $7.15.
The global wheat outlook for 2023/24 is for larger supplies, consumption, and trade with reduced stocks. Supplies are projected to increase 0.8 million tons to 1,057.8 million, primarily on higher government production estimates for Australia, Russia, and Argentina partially offset by reductions for the EU and Serbia. Global consumption is raised 1.5 million tons to 799.0 million, mainly on higher feed and residual use for the EU, Kazakhstan, and Indonesia. World trade is raised 1.4 million tons to 212.1 million on higher exports by Ukraine, Australia, and Turkey. Projected 2023/24 global ending stocks are lowered 0.6 million tons to 258.8 million, the lowest since 2015/16.