SUGAR: Mexico production for 2023/24 is projected at 4.572 million metric tons (MT), a decrease of 175,090 from last month and 651,856 lower than last year. Area harvested is running over 20,000 hectares below the level forecast by CONADESUCA resulting in the current USDA projection of 727,116 hectares.
Interim analysis based on the CONADESUCA production data through March 30 supports an increase in sugarcane yield from last month to 62.25 MT/hectare and also in sucrose recovery to 10.10 percent. However, the area reduction more than offsets the yield and recovery increases to reach this month’s projection of sugar production. Production of low polarity sugar is reduced by 107,206 MT to 320,067 as producers have hastened the trend toward more profitable estandar sugar for the domestic market at the expense of less low polarity sugar. The low polarity sugar share of total production is at 7 percent, down from 9 percent last month.
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 426,757 MT, a decrease of 142,941.
On April 5, the Secretaría de Economía in Mexico announced that it would temporarily accept imports of sugar intended for use in the IMMEX program until August 31 with each shipment requiring its approval. This effectively means that imports from the United States under USDA’s re-export import program can be shipped duty-free into Mexico only for use in IMMEX. Thus, 50,000-MT worth of Mexico production for IMMEX can be redirected to deliveries for human consumption. With more net sugar available, IMMEX is projected 25,000 MT higher at 425,000 MT.
Given that Mexico has imported 435,000 MT of high-tier tariff sugar for consumption through March 31, USDA projects imports in the pipeline at 40,000 MT, implying imports for consumption at 475,000 MT. Total imports are, therefore, at 575,000 MT. Exports to other countries are residually projected at 43,914 MT.
U.S. beet sugar production for 2023/24 is decreased by 27,340 short tons, raw value (STRV) to 5.144 million on lower forecast sucrose recovery. Beet pile shrink is unchanged at 9 percent. Cane sugar production is unchanged. TRQ imports are up WASDE-647-4 25,086 STRV to 1.775 million on higher imports expected from Argentina and Panama. TRQ shortfall falls by that same amount to 66,690 STRV. Imports from Mexico decrease by 167,020 STRV to 498,644 but are largely offset by an increase of high-tier tariff imports of 140,000 STRV (all raw sugar) to bring the total to 855,000. This pace-to-date adjustment reflects that imports for the remaining 6 months of the fiscal year will be close to imports for the first 6 months.
Exports are increased by 37,634 STRV to 197,634 as increased program exports more than offset a reduction of other sugar exports to Mexico. Deliveries for consumption are unchanged. Deliveries for human consumption were low in February due to a likely underreporting of direct consumption imports in February that will see an offsetting expansion in March. Ending stocks are projected at 1.722 million STRV for an ending stocks-to-use ratio of 13.50 percent.
WHEAT: This month’s supply and demand outlook for 2023/24 U.S. wheat is for lower supplies, reduced domestic use, unchanged exports, and higher ending stocks. Supplies are tightened with a reduction in projected imports by 5 million bushels to 140 million on a slower-than-expected import pace, primarily for Hard Red Winter. Domestic consumption is forecast down on lower-than-expected implied feed and residual use in the second and third quarters based on the latest NASS Grain Stocks report.
As a result, annual feed and residual use is lowered 30 million bushels to 90 million. Projected 2023/24 ending stocks are raised 25 million bushels to 698 million, 22 percent above last year. The season average farm price is reduced $0.05 per bushel to $7.10.
The 2023/24 global wheat outlook this month is for larger supplies, consumption, and exports and smaller ending stocks. Supplies are raised 0.6 million tons to 1,058.4 million on increased production estimates for the EU, Moldova, and Pakistan. The world consumption forecast is increased 1.1 million tons to 800.1 million. Food, Seed, and Industrial use in India is increased 2.0 million tons this month to 106.2 million. The latest monthly stocks reports issued by the Food Corporation of India shows continued open market sales as the Government of India attempts to limit food price inflation ahead of elections, which begin later this month.
Global feed and residual use is forecast lower on reductions for Russia and the United States that are only partly offset by increased use for the EU. Projected 2023/24 global trade is raised 1.3 million tons to 213.5 million, mostly on higher export forecasts for Russia and Ukraine that are only partly offset by a reduction for the European Union. Russia’s export forecast is raised 1.0 million tons to 52.0 million, as shipments have continued at a robust pace.
Ukraine exports are raised, up 1.5 million tons to 17.5 million as competitive prices and expanded operating hours at the ports of Odessa this year allow trade to increase. EU exports, however, are reduced 2.0 million tons to 34.5 million as competition from the Black Sea has restrained their exports to date. Projected 2023/24 world ending stocks are down 0.6 million tons to 258.3 million as lower stocks for India and Ukraine are only partly offset by increases for Algeria and the EU. If realized, global stocks for 2023/24 would be five percent below last year and the lowest since 2015/16.