Currently 57% of the US winter wheat belt is


experiencing some degree of drought.


last year due to drought. As a result, western corn belt basis levels soared to pull corn from record producing areas in the east. The surging corn basis has made HRW wheat competitive in feed rations. The incentive to feed wheat will likely grow in the late summer months, after the local wheat harvest and prior to the new crop corn harvest. While I believe US wheat used for feed could double in the coming marketing year, that would only take 2 mmt of supplies. Exports could still increase by 5 – 6 mmt to absorb other global shortages. While global price volatility has relaxed in recent months, I wouldn’t expect that to continue much longer. Between war, potential extension of the BSGI, tug of war between higher interest rates and inflation, and of course mother nature, wheat prices could easily reset at levels much different than today.


Mark Soderberg Senior Agricultural Market Analyst ADM Investor Services Inc. E: mark.soderberg@admis.com


Bil. Bu.


0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00


2007 Source: USDA 2009 2011 2013 2015 Production 2017 Yield 2019 2021 2023 Est. US Winter Wheat Production BPA


40.0 42.5 45.0 47.5 50.0 52.5 55.0 57.5


Global Wheat Exports


0% 5% 10% 15% 20% 25% 30% 35%


17/18 Source: USDA 18/19 19/20 Russia/Ukriane EU 20/21 Australia 21/22 Canada 22/23 US


9 | ADMISI - The Ghost In The Machine | Q1 Edition 2023


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