What do the latest data on wheat harvests tell us?

The global wheat market is going through a phase of significant fluctuations, with wheat futures on the Chicago stock exchange reaching record levels exactly two years ago following the Russian invasion of Ukraine, immediately calling into question almost 30% of the global wheat exports.
However, the current scenario is radically different, as last Wednesday CBOT (Chicago Board of Trade) wheat futures hit their lowest since August 2020, following the trend already undertaken by corn and soybeans, which last week recorded their lowest prices since late 2020.
Theoretically, the global supply outlook for wheat is not necessarily negative, especially when compared to that of corn and soybeans.
Estimates from the US Department of Agriculture suggest that global grain ending stocks for the 2023-24 season will decline for the fourth consecutive season, hitting eight-year lows.
Excluding China, known for its cereal reserves, the lows for eleven years are expected.
Isolating major grain exporters, the stock-to-use ratio, a measure of the balance between supply and demand, is expected to hit a three-year low at 14.8% in the 2023-24 season, up from 15.9% in the season previous.
The average for the last ten years stands at around 16.9%.
For corn and soybeans, the global stock-to-use ratio is estimated at 23% and 21%, respectively, marking four- and five-year highs.
The latest outlook for wheat exporters doesn't differ much from what the USDA projected for 2021-22 in March 2022, about two weeks after the Russian invasion.
Inventories estimated at 14% in that period were down from the 15% estimated for 2020-21 and expected to hit fourteen-year lows.
However, wheat exporters' inventories in 2021-22 increased to 15.4%, as skyrocketing prices likely limited demand in the second half of the year.
Stocks also increased the following year, thanks to Ukraine's surprisingly robust export efforts and a huge growth in Russian supplies.
This trend continues into 2023-24, with the stock-to-use ratio among major exporters rising to 14.8%, up from 13.5% forecast last September, for example.
Global wheat prices have been under pressure for months due to abundant supplies from top exporter Russia.
Russian wheat shipments last month hit record volumes for February, and export prices have fallen about 16% since Feb.
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Refinitiv data shows Russian wheat export prices this week fell below $200 per metric ton ($5.44 per bushel) for the first time since August 2020, marking the lowest early March price since 2017 The Ukrainian program is progressing well, and as of Wednesday, the season's grain exports were up 6% from a year earlier.
The USDA expects a 12% annual decrease in Ukrainian wheat shipments for 2023-24, but that figure could be revised Friday in the agency's monthly supply and demand report.
CBOT wheat's Wednesday closing value at $5.31 a bushel is the lowest for the date since 2020, when wheat closed around $5.16.
Speculators were relatively bullish on wheat at the start of 2020, in contrast to current pessimistic views.
However, the funds' current net position in wheat is not as extreme as those in corn and beans, which makes sense based on the broad global supply situation for each crop.
CBOT wheat has lost 15% so far in 2024, a very similar decline to the same period last year, although prices are about 24% lower than last year and nearly 60% lower than the peak of March 2022.
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