Wheat Market Outlook and Prices

The Wheat Market Outlook is provided by Mercantile Consulting Venture Inc.

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World Wheat Overview:

September USDA – WASDE Report

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  • The USDA/WASDE report left the overall US wheat balance sheet unchanged, while increasing global total wheat supply by 4.7 mln mt on higher production and ending stocks.
  • The big surprise was that Russian production was increased by 3 mt to 71 mln mt on better than expected winter wheat harvest, and “excellent weather in the spring wheat belt” (which is against everything we have heard). Nevertheless, this increase caused global production to be 3.4 mln mt higher.
  • Decreases were seen in Canadian (down 1 mln to 31.5 mln mt) and Australia (down 2 mln to 20 mln mt) wheat production, although less than StatsCan and ABARES numbers (we think StatsCan numbers are too low and Sept is an important growing month for Aussie wheat, so there will likely be further revision of their crop in the Oct report).
  • Russian and EU feed/residual numbers were increased to a more reasonable 8% decrease from last year as opposed to 16% in the last report.
  • World exports were lowered due to decreases in Canada and Australia. However, EU, Russia (still at 35 mln mt), Ukraine, and US exports were left unchanged (US S&D’s were left entirely unchanged as all changes made within wheat classes were off-setting)

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Wheat Market Outlook

Significant events:

  • Turkey banned the writing of contracts in US dollars or in Euros, and Turkish flour mills reportedly halted production due to new flour export regulations.
    • There are reports of 65 Turkish flour mills halting production due to the new flour export regulations (not bullish Russian Wheat).
  • Algeria bought 630k mt of French wheat, so French wheat could potentially play a significant role in the big 595k mt Saudi wheat tender.
  • The USDA/WASDE report left US wheat S&D’s unchanged, while increasing global total wheat supply by 4.7mln mt on higher production and ending stocks.
    • The big surprise was that Russian production was increased by 3 mln mt to 71 mln mt on better than expected winter wheat harvest, and “excellent weather in the spring wheat belt” (this is against everything we have heard). Nevertheless, this increase caused global production to be 3.4 mln mt higher.

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Primary Elevator Bids

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Primary elevator bids data source: PDQ

Grade Spreads in Canadian Dollars

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Relevant FOB Prices and Calculated Basis

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CLICK HERE to learn what the basis is and why it is important.

 

 

 

adobe-acrobat-pdf-file-512 CLICK HERE for the full report in PDF.

For the archived wheat market outlook and price reports, please CLICK HERE