SUGAR: Estimated U.S. ending sugar stocks for 2021/22 are increased 64,410 short tons, raw value (STRV) to 1,781,774, as an increase in supply is only partially offset by an increase in use.
USDA estimates imports to increase by 217,197 STRV. On July 1, the Department of Commerce increased the 2021/22 Mexico export limit by 135,000 STRV. This is counted as “Additional U.S. Needs Sugar” that has a polarity of less than 99.5 degrees, meaning that it is considered as raw sugar. All of this sugar is projected to enter in 2021/22. Last week USDA increased the 2021/22 raw sugar TRQ by 99,999 STRV and also extended the period for this sugar to enter the United States until the end of October. Although USTR has not yet allocated the TRQ to supplying countries, USDA projects that 38,270 STRV will enter in September for 2021/22 and 55,115 will enter in October for 2022/23 with the remainder adding to the raw sugar TRQ shortfall.
USDA increased its estimate of high-tier tariff imports by 43,927 STRV to 278,436 on additional high duty raw sugar entering in June and on an increase in the expected pace of high-duty refined sugar entering for the remainder of the year. Other than imports, supply is slightly decreased by a reduction in Florida cane sugar production only partially offset by a small increase in beet sugar production as reported by processors.
A partial offset to the supply increase comes from a 150,000 STRV increase in deliveries for human consumption to 12,600,000. The delivery pace for the first 8 months of the fiscal year is up 3.9 percent compared with the same period average for the 5 preceding years. The strong pace of deliveries is expected to continue into 2022/23 for a period of time and is presently projected to add 75,000 STRV to bring the total up to 12,525,000.
Projected beet sugar production in 2022/23 is increased by 124,335 STRV to 4,933,728 based on the 3.1 percent increase in NASS estimated planted area in the June 30 Acreage report over that indicated in Prospective Plantings at the end of March. Most notably, area planted in the Upper Midwest is estimated 7.4 percent higher than in Prospective Plantings as additional area was planted to compensate for expected low yields due to delays in planting in May. Sugarbeet harvested area is projected at 1,146,100 acres, up 3.5 percent over last year. Yield and recovery parameters, as well as August-September production (500,000 STRV), are unchanged from last month.
Imports for 2022/23 are projected at 3,501,025 STRV, an increase of 487,829 over last month. As indicated above, some of the increase is due to additional raw sugar entering in October from the increase in the 2021/22 raw sugar TRQ. Sugar entering under the 2022/23 TRQs is still projected at the minimum levels with the WTO and FTA bindings and with a raw sugar TRQ shortfall projected at 99,208 STRV. To date there has been no announcement regarding additional specialty TRQ sugar. Given these aforementioned 2022/23 projections and under the terms of the AD/CVD Suspension Agreements, sugar imported from Mexico would be expected to be projected at a level resulting in an ending U.S. stocks-to-use ratio of 13.5 percent assuming sufficient Mexican sugar for export after meeting domestic requirements in Mexico. Because USDA is not making any changes to Mexico supply and use projections for 2022/23 at this time, the implied maximum sugar available for export to the U.S. is projected at 1,756,180 STRV. This is less than the 1,900,775 STRV needed to a result in ending stocks of 1,709,775 for a 13.5 percent stocks-to-use ratio.
WHEAT: The outlook for 2022/23 U.S. wheat this month is for larger supplies, domestic use, exports, and ending stocks. Supplies are raised on increased production, which is up 44 million bushels to 1,781 million, on an increase in harvested area and higher yields. The first 2022 survey-based production forecast for other spring and Durum indicated a large increase from last year’s drought-reduced output at 503 million and 77 million bushels, respectively.
Winter wheat production is also forecast higher at 1,201 million bushels on an increase in harvested area. The 2022/23 export forecast is raised 25 million bushels to 800 million as the recent decline in U.S. prices makes exports more competitive in international markets. The projected season-average farm price (SAFP) is lowered $0.25 per bushel to $10.50 on declines in futures and cash prices.
The 2022/23 global wheat outlook is for fewer supplies, reduced consumption, higher exports, and increased stocks. Supplies are reduced 1.1 million tons to 1,051.7 million as less production is partially offset by larger beginning stocks. Production is revised lower for the EU, Ukraine, and Argentina, which is only partially offset by upward revisions for Canada, the United States, and Russia.
EU production is lowered 2.0 million tons to 134.1 million, as ongoing dry weather lowered yield prospects primarily in Spain, Italy, and Germany. Ukraine production is lowered 2.0 million tons to 19.5 million on a reduction in harvested area, as indicated by government statistics. Production in Canada is increased 1.0 million tons to 34.0 million on the Statistics Canada Principal Field Crop Areas survey showing higher planted area than intentions. Projected 2022/23 global trade is raised 0.9 million tons to 205.5 million as higher exports from Canada and the United States are only partially offset by lower exports from Argentina and the EU. World consumption is lowered 1.8 million tons to 784.2 million, primarily on reduced feed and residual use in the EU and Ukraine. Projected 2022/23 world ending stocks are raised 0.7 million tons to 267.5 million but remain the lowest since 2016/17.