Market Outlook

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U.S. Wheat Price Projected at Record High, Supported by Tight Stocks

The U.S. season-average farm price (SAFP) for 2022/23 is projected to reach a record $10.75 per bushel, supported by tight domestic stocks (figure 1). In 2021/22, stock levels declined due to drought conditions in key Hard Red Spring, Durum, and White wheat production areas, which contributed to the smallest U.S. crop since 2002/03. For 2022/23, slightly larger production is projected compared to the previous year but this would still be the second lowest in the last 20 years based on pervasive drought in major Hard Red Winter growing areas. Even with domestic use and exports projected down from the previous year, ending stocks are forecast to decline once again. The ending stocks-to-use ratio is projected at 32.8 percent, its lowest since 2013/14. Further contributing factors for the high forecast SAFP include elevated cash and futures prices, uncertainty in global wheat markets, strong pricing for other commodities, and high prices for agricultural inputs.