WASHINGTON — The US Department of Agriculture on Aug. 12 lowered its forecasts for 2021-22 US and world wheat ending stocks. Wheat futures posted wide gains in response to the new projections that lowered US and world supplies more than markets had anticipated.

The USDA forecast the US carryover of wheat on June 1, 2022, at 627 million bus, down 38 million bus from the July projection and down 217 million bus, or 26%, from 844 million bus in 2021.

The USDA forecast US all-wheat production in 2021 at 1,697 million bus, down 49 million bus from the July projection and down 129 million bus, or 7%, from 1,826 million bus in 2020. The market was caught off guard as the lower all-wheat production projection was because of reductions to the hard red winter and white wheat estimates. The forecast for hard red spring wheat production was unchanged from July.

The smaller crop translated to a smaller 2021-22 supply now forecast at 2,686 million bus, down 49 million bus from July and down 268 million bus, or 9%, from 2,954 million bus in 2020-21.

Domestic use in 2021-22 was projected at 1,184 million bus, down 11 million bus from July as food use of wheat was lowered 1 million bus, to 962 million bus, and feed and residual use was lowered 10 million bus, to 160 million.

US wheat exports in 2021-22 were forecast unchanged from July at 875 million bus, which was down 117 million bus, or 12%, from 844 million bus in 2020-21.

The USDA projected 2021-22 world wheat ending stocks at 279.06 million tonnes, down 12.62 million tonnes from July and down 9.77 million tonnes, or 3%, from 288.83 million tonnes in 2020-21. 

The lower world endings stocks forecast was tied to a 15.49-million-tonne reduction in the world wheat production projection for 2021-22 to 776.91 million tonnes. Standing out in the 2021-22 world wheat balance sheet were lower production forecasts for the United States, Canada and Russia, which more than offset a higher forecast for Australia.

The USDA forecast the 2021 Canadian crop at 24 million tonnes, down 7.5 million from the July projection. The Russian crop was forecast at 72.5 million tonnes, down 12.5 million tonnes from the July outlook. The Australian crop was forecast at 30 million tonnes, up 1.5 million tonnes from July.