Wheat Market Outlook and Prices

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

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World Wheat Overview:

global-wheat-production-and-consumption

 

    • World wheat Production: USDA projects the 2017/18 world wheat production to drop to 737.8 million mt from last year’s 753.1 million mt.
    • World wheat supply: The 2017/18 world wheat supply is shown to drop only slightly to 993.2 million mt (995.51 million mt last year) due to the hefty carry-in this crop year of 255.35 million mt.
    • Utilization: A 5 million mt drop in world demand with demand for feed wheat down 9 million mt.
    • Trade: There are major changes in the world export matrix compared to 2016/17: the US is projected down 1 million mt, Ukraine down 3.3 million mt, and Aussie down 5 million mt, while the EU is up 4 million mt, Canada up 2 million mt and Russia/Argentina both up 1 million mt.
    • 2018 ending stocks: Despite a 15 million mt drop in production, world stocks are forecast to rise to 258.29 million mt (from 255.35 million mt this crop year). However, note that if you if you were to remove China from the equation, then ending stocks would actually be the lowestin four years.  In addition, there is probably still much to report about the winter wheat crop in the US as we move forward in the crop year.
    • Observation: Excluding the Chinese and Indian wheat production, the remaining world production is down 30 million mt, stocks are down 15 million mt, and major exporter stocks are down 13 million mt. The markets do not show it, but without reaching trend yields, the world wheat market may be ill supplied next crop year.

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Wheat Market Outlook

Significant events this past week:

  • USDA projected world wheat Production for 2017/18 to drop to 737.8 million mt from last years 753.1 million mt. Excluding the Chinese and Indian wheat production from the equation, the remaining world production is down 30 million mt, stocks are down 15 million mt, and major exporter stocks are down 13 million mt. The markets do not show it, but without reaching trend yields, the world wheat market is going to be ill supplied
  • EU: Weekly soft wheat shipments were 250k mt for a season total 21.1 million mt, down almost 20% on last year, whilst the all-wheat cumulative at 23.3 million mt is down 17%.
  • Europe saw near normal precipitation early in the week, but turned much drier in the north with warming temperatures.
  • Russia: USDA reduced FSU 2017 wheat crop by 10 million mt basis trend yields. 6 million mt of this was in Russia (67 million mt), but USDA still raised Russia’s 2017/18 export number 1 million mt from this year to 29 million mt.
  • The Rouble rose 1.6% as crude bounced,
  • The Egyptian Pound was flat; GASC’s absence has been 9 weeks.
  • Australia: USDA confirmed ABARE’s 10 million mt drop in production at 25 million mt, but this number is purely based on trend yield.

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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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fob-and-basis-may-15

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.

Latest Research

Effects of vertical tillage on soil structure and crop yields in southern Saskatchewan

Vertical tillage has become common in Southern Saskatchewan because of producer concerns about wet soils in the spring and high amounts of crop residues to manage. However, there is a lack of information available on the effects of vertical tillage in soils with contrasting soil water conditions, and there is no information available on the vertical tillage effects in southern Saskatchewan.

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