WMR-2022 U.S. HRS Situation
By: Jim Peterson
Posted: Nov 15 2022
The U.S. hard red spring (HRS) wheat crop is 50% larger compared to the devastating drought in 2021. This has boosted overall supplies to 646 million bushels, but up just 12%, as sharply lower beginning stocks offset part of the production gains.
USDA is projecting demand to grow by 20 percent. The projected rebound in domestic use is due to the more favorable price relationship between HRS and hard red winter. Last year, a number of U.S. mills reduced their share of HRS due to the significant price premium. That premium has all but disappeared, and in some market segments, HRW is priced above similar protein HRS.
On the export side, early projections are for an 8% gain, to 225 million bushels. This would still be below our five-year average, but a welcome boost from last year’s challenging export year. International demand has been slow to develop in key buyers like the Philippines and Japan, but we are seeing steady sales to Taiwan, South Korea and Thailand. Strong gains are being seen in Mexico, Nigeria and Vietnam with sales up by more than 60 percent. Overall U.S. HRS exports stand at 132 million bushels at the end of October, up 6% from last year.
Good early season exports for HRS have been supportive to prices, with producer bids rebounding off of harvest lows. Further price support through the marketing year will depend on continued strong export and domestic demand.