World Wheat Supply and Demand Situation and Outlook

By Stephanie Bryant-Erdmann, USW Market Analyst

The USDA pegged 2016/17 world wheat production at 753 MMT (27.6 billion bushels), up 2 percent from 735 MMT (27.0 billion bushels) in 2015/16 and 6 percent above the 5-year average. If realized, it would be the fourth consecutive year of record wheat world production. USDA projects production will increase in seven of the eight major exporting countries. The only exporter with decreased production is the European Union.

Record-large world carry-in stocks add to the global surplus, resulting in the largest estimated world wheat supply on record. USDA estimates 2016/17 world carry-in stocks at 240 MMT (8.84 billion bushels), up 11 percent from last year and greater than the 5-year average of 197 MMT (7.25 billion bushels). Total world supply will reach a projected 993 MMT (36.5 billion bushels), up 40.4 MMT from the record set in 2015/16. The ample world supply will help meet strong global wheat demand.

USDA expects total consumption will increase for the fourth consecutive year and reach a record 740 MMT (27.2 billion bushels), compared to 712 MMT (26.2 billion bushels) in 2015/16. Feed wheat use is predicted to grow an estimated 6 percent to a record high 147 MMT (5.42 billion bushels) due to increased global supplies of feed wheat after rain increased yield in nearly every producing region (with western Europe a notable exception) but hurt quality.

USDA expects 2016/17 world wheat trade to grow to a record large 178 MMT (6.54 billion bushels). If realized, it would be 11 percent greater than the 5-year average of 160 MMT (5.86 billion bushels).  USDA expects world carry-out stocks to increase 12.8 MMT (470 million bushels) year over year to 253 MMT (9.31 billion bushels), 23 percent greater than the 5-year average of 206 MMT (7.56 billion bushels).