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The U.S. wheat outlook for 2024/25 predicts larger supplies and increased exports due to competitive prices and reduced Black Sea exports. Domestic use remains steady, while ending stocks slightly decline. Globally, wheat supplies shrink due to adverse weather in key regions, leading to higher prices and reduced consumption and trade.

U.S. Wheat Outlook for 2024/25

Larger Supplies and Increased Production: The U.S. wheat outlook for 2024/25 anticipates larger supplies due to a forecasted all wheat production of 1,875 million bushels. This figure represents an increase of 17 million bushels from the previous month, driven by higher Hard Red Winter wheat production, which compensates for reductions in Soft Red Winter and White Winter wheat.

Unchanged Domestic Use: Domestic use of wheat remains unchanged in the 2024/25 outlook. The stability in domestic demand suggests that any increase in supply will be directed towards export markets or added to ending stocks.

Increased Exports: The export forecast for U.S. wheat is raised by 25 million bushels, reaching 800 million bushels. This increase is attributed to the expected competitiveness of U.S. wheat prices on the global market, influenced by reduced exportable supplies from the Black Sea region, particularly from Russia and Ukraine.

Lower Ending Stocks: Despite the increased production, ending stocks for U.S. wheat are slightly lowered to 758 million bushels. However, these stocks remain significantly higher than the previous year, indicating a relatively healthy supply cushion going into the next season.

Higher Season-Average Farm Price: The 2024/25 season-average farm price for U.S. wheat is projected to rise by $0.50 per bushel, reaching $6.50. This increase is driven by higher expected futures and cash prices and tightening global wheat supplies, which exert upward pressure on prices.

Global Wheat Outlook for 2024/25

Smaller Global Supplies: The global wheat outlook for 2024/25 projects smaller supplies, with a decrease of 5.7 million tons, bringing the total to 1,050.3 million tons. This decline is primarily due to significant reductions in production in Russia, Ukraine, and the EU, partially offset by larger global beginning stocks.

Reduced Production in Key Regions: Russia’s wheat production is forecast to drop by 5.0 million tons to 83.0 million due to adverse weather conditions, including hot, dry weather and May frosts. Similarly, Ukraine’s production is lowered by 1.5 million tons to 19.5 million tons due to similar weather conditions. The EU’s production is reduced by 1.5 million tons to 130.5 million due to prolonged wet weather in France, which has lowered yield potential.

Lower Global Consumption: Global wheat consumption is projected to decrease by 4.3 million tons to 798.0 million tons. This reduction is mainly attributed to lower feed and residual use in the EU, Russia, and Ukraine as wheat becomes less competitive as a feed source due to tightening supplies and rising prices.

Decreased Global Trade: World wheat trade is forecast to decline by 3.2 million tons to 212.8 million tons. This reduction is a result of lower exports from Russia and Ukraine, which are only partially offset by increased exports from the EU and the United States, reflecting shifting supply dynamics and trade patterns.

Lower Global Ending Stocks: Projected global ending stocks for 2024/25 are lowered by 1.3 million tons to 252.3 million tons. This decrease is primarily due to reduced stocks in the EU, reflecting the overall tightening of global wheat supplies and the impact of adverse weather conditions on production.

Conclusion

The 2024/25 wheat outlook presents a mixed scenario: while the U.S. anticipates robust production and increased exports, global markets face tightening supplies and higher prices due to weather-related declines in key producers like Russia, Ukraine, and the EU. This dynamic underscores the importance of competitive pricing and strategic export positioning for the U.S. in a globally constrained wheat market. As supplies tighten, maintaining balance between domestic stability and export opportunities will be crucial.

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