Wheat Market Outlook and Prices
The Wheat Market Outlook is provided by Mercantile Consulting Venture Inc.
Click the links below to go directly to that section
- World Wheat Overview:
- Wheat Market Outlook
- Primary Elevator Bids
- Grade Spreads in Canadian Dollars
- Relevant FOB Prices and Calculated Basis
- October 12th USDA WASDE Report:
- World wheat production for 2017/18 has again been increased, now by 6.34 million mt from last month’s report due to production increase in Russia, the EU, and India.
- Canadian Wheat Production is now projected to be 27 million mt, up from last month’s estimate of 26.5 million mt.
- Australian Wheat Production has been reduced by just 1 million mt, to 21.5 million mt which is a smaller than expected reduction.
Global wheat production and trade:
There is a lot of competition in the wheat markets as wheat is produced around the world. Below is a brief synopsis on this week’s market events in the major wheat origins.
- Futures: Wheat markets closed higher in Fridays trade as they rebounded from Thursday’s losses. In Chicago, December contract wheat closed at 439.4 which was up by 9 cents in Fridays trade, but down by 4 cents for the week. In Kansas, December contract hard red winter wheat closed at 436.2, which was up by 10 cents in Fridays trade, and unchanged for the week. In Minneapolis, December contract hard red spring wheat closed at 613.2 which was up by 3.6 cents for the day, but down by 8.6 cents for the week.
- Funds Index Funds did virtually nothing during the week, while speculative elements increased their wheat and corn short following release of the WASDE report and bought in the soy complex.
- Matif: Matif exchange in Europe dropped a small € 3.25/mt over the past week, but was up by € 0.25 in Fridays trade.
- According to the CGC, producers delivered 266k mt of wheat into the handling system, which is down from last week’s 364k mt. Exports for week 10 were 180k mt, down from last week’s 301k mt, and up by 13% from last year’s YTD exports.
- Elevator stocks are currently at 3.225 million mt with 1.525 million mt at primary elevators and most of the remaining inventory at port.
- Wheat visible stocks are a big 3.2 mln mt, as shipping/ rail loadings continue to be much smaller than deliveries into the primary elevator system.
- Producers delivered 33k mt of durum into the handling system over the past week. Durum exports during week 10 amounted to 42k mt; 684k mt year-to-date. This is 21% ahead of last year’s year to date exports of 563k mt.
- Saskatchewan’s crop progress report indicates that the Saskatchewan harvest is now 94% complete, which is up from 89% complete last week and many producers are now completely finished.
- The Alberta harvest is lagging only slightly behind Saskatchewan, with 89% of the Alberta crop reported to be harvested as of October 10th.
- US winter wheat planting is now 48% complete, which is close to trade expectations but is still behind the 5-year average of 58% planted for this year to date. 25% of the US winter wheat crop is reported to be emerged. The October 3rd USDA drought monitor report indicates that 20% of US winter wheat lies within drought affected regions. This year’s US spring wheat production was increased by 5.8% from 364 million bushels last month, to 385 million bushels this month. Spring wheat supply thus went up from 672 million bushels last month, to 693 million bushels this month. Total use of spring wheat increased from 526 million bushels to 531 million bushels, and US ending stocks also rose from 131 million bushels in Aug, to 146 million bushels in Sept, and then to 162 million bushels in Oct.
- Eastern Australia has had some recent rains in Queensland and New South Wales, but rains are thought to be too late to significantly boost yield potential. Western Australia remains dry and drought prevails is most regions. In the October 12th USDA crop progress report, the USDA has lowered projections for the Australian wheat harvest from 22.5 million mt, to 21.5 million mt. While this is a significant reduction, it is much smaller than was expected, and most private estimates project Australian wheat production in the range of 18 – 20 million mt.
- Australian new crop Fob wheat and futures values fell sharply as prospects seemed to improve on better rains.
- While there was also some speculation that the USDA might cut Argentine wheat production due to excess moisture in the north, and drought in the south, this failed to materialize and USDA estimates of Argentine wheat production remain at 17.5 million mt. However, early harvest reports from Argentina have been reporting lower than expected yields and its thought that USDA numbers could be a bit optimistic.
- In South America, Argentine Fob values are little changed, despite the Buenos Aries Grain Exchange’s recent estimate that 57% of the Argentine wheat crop as good or excellent, while 23% of the crop is reported to have excess moisture despite improving weather.
- In last week’s WASDE report, the USDA increased its estimates of Russian wheat production by 1 million mt to 82 million mt. While this is a significant increase, most analysts were expecting a much larger increase and some estimates have pegged Russian wheat production as high as 87 million mt. While Russian production increased were smaller than expected, the USDA did increase EU wheat production by 2.2 million mt which was not as anticipated. The increases in EU wheat production were attributed to higher than expected production in France, which was downgraded earlier in the year due to drought.
Black Sea wheat:
- Black Sea wheat prices were pretty static all week with Russian 12.5% protein wheat for Oct-Nov at US$193/mt plus US$1 per month carry. The 11.5% protein discount remained around US$6/mt with feed a further US$8/mt lower.
Significant purchases/ trades:
- Egypt (GASC) bought 170K mt of Russian wheat in their latest tender at US$214-$215/mt C&F. The price was up about US$1/mt from last week’s tender. Romanian and French wheat was also offered in the tender. The Romanian wheat was reportedly US$3/mt too expensive to be competitive. (The weight of harvest pressure seems to have passed in Russia and more grains are going under cover; more due to lack of export transportation than a lessening of the desire to sell.)
- Bangladesh purchased 100k tons of Black Sea Wheat for November / December shipment. The 11.5 % protein wheat is reported to have traded at $223 / ton, while 10.5 % traded at $ 218 per mt. Both are quoted on a C& F basis.
- Tunisia bought 75k mt durum wheat at US$285/mt for Dec-Jan’18 shipment, and 50kt soft wheat at US$209/mt.
- The latest USDA supply and demand report was bearish for wheat showing both U.S. and world ending stock projections larger than anticipated. The world wheat number was particularly bearish, adding 5 mln mt to projected ending stocks this year.
- In the past week reports indicate that Indian wheat production is higher than earlier thought, with 2017/2018 Indian wheat production now projected at a record 98.38 million mt, up from 96 million mt in the September report. Due to higher production, estimates for Indian wheat imports have been lowered by 0.5 million mt, to 3.5 million mt. India is the world’s 3rd largest wheat producer, and was responsible for 12% of 2016/2017 global wheat production.
- Argentina announced this past week that they will export wheat to Mexico for the first time, with 27k mt of sales scheduled for December delivery. Prior to this, Argentina has only exported wheat to Brazil, and Mexico’s recent wheat purchase might be taken as indicative of Mexico’s weakening trade relations with the US.
- Agriculture and Agri-Food Canada released their outlook for principle field corps this past week, and have projected all Canadian wheat production to be 22.8 million mt, which is an increase of 1.2 million mt from their September estimate. This upward adjustment combined with higher US production in the USDA report, leaves hard red spring wheat well enough supplied and with a bearish outlook.
- A major re-allocation of the world export matrix is still needed. It is now underway, with French wheat pricing, Southern Hemisphere crops, and Russia’s real export capacity being the keys. At the present time, Russian and FSU crops are leading exports whilst North American and EU exports are lower.
Primary elevator bids data source: PDQ
CLICK HERE to learn what the basis is and why it is important.
|CLICK HERE for the full report in PDF.|
For the archived wheat market outlook and price reports, please CLICK HERE.
Wheat Market Outlook and Prices
- Producer Info
- About Sask Wheat
- Contact Us
- Marketing Info
- News & Events
- Privacy and Disclaimer
- Reports & Presentations
- Wheat Market Outlook and Prices
- Wheat Market Outlook Archive
- Thank you for registering for Grade School in Rosetown
- Thank you for registering for Grade School in North Battleford
Diversifying organic cropping options for the brown soils through intercropping
The purpose of this project is to determine if intercrops can reduce weed populations compared to sole non-competitive crops and in the following spring wheat crop.view all