Wheat prices rose sharply amid the forecast of a reduction in production in the United States
The updated global wheat balance from the USDA yesterday caused a sharp increase in wheat prices on US stock exchanges due to lower forecasts for spring wheat production in the United States, as well as the first reduction in the forecast for global wheat production in the new season.
Experts of the US Department of Agriculture in a July report adjusted the forecast of wheat consumption in 2020/21 MG in the direction of increase by 3.4 million tons, which led to a sharp decrease in World Final reserves by 3.3 million tons to 290.18 million tons.
In the world balance sheet for my 2021/22, the forecast for world wheat production was lowered by 2.04 million tons to 792.4 million tons (775.8 million tons in 2020/21 and 763.5 million tons in my 2019/20) due to a sharp decrease in the yield estimate for the United States by 4.14 million tons to 47.52 million tons, as well as for Kazakhstan 1 million tons to 13 million tons, Russia by 1 million tons to 85 million tons and Canada by 0.5 million tons to 31.5 million tons due to drought in spring wheat areas.
At the same time, an increase in the forecast of the wheat harvest in Australia by 1.5 million tons to 28.5 million tons, as well as in the EU by 0.7 million tons to 138.2 million tons, the UK by 0.7 million tons to 14.8 million tons, Ukraine by 0.5 million tons to 30 million tons compensates for these losses.
The forecast for global wheat consumption in my 2021/22 was slightly lowered by 0.22 million tons to 790.89 million tons (784.95 million tons in 2020/21 and 748.33 million tons in my 2019/20).
A decrease in initial stocks, as well as a decrease in production, will reduce the forecast of World Final wheat stocks in 2021/22 MG by 5.12 million tons to 291.68 million tons (290.18 million tons in 2020/21 and 299.22 million tons in 2019/20 mg), while analysts predict them at 295.5 million tons.
The forecast for world wheat exports increased by 0.8 million tons to a record 204 million tons due to an increase in the export forecast for the EU by 1 million tons to 34 million tons, Ukraine by 0.5 million tons to 21 million tons, Australia by 0.5 million tons to 20.5 million tons, which compensates for the reduction for Canada by 0.5 million tons to 23 million tons, Kazakhstan by 0.5 million tons to 7.5 million tons and the United States by 0.68 million tons to 23.81 million tons.
Projected final wheat stocks in the United States in 2021/22 MG will fall to 18.09 million tons, the lowest since 2013/14 MG. Due to dry weather in the US Plains, the forecast for durum spring wheat production in the United States may decrease by 41% compared to last year and will be the lowest figure since 2002.
September quotes of American wheat rose:
soft wheat SRW in Chicago by 9 9.46 to 2 235.43 / ton;
HRW durum wheat in Kansas City by 7 7.81 to 2 226.06 / ton;
hrs durum wheat in Minneapolis increased by 1 15.80 to 3 314.98 / ton.
The increase in forecasts for the EU wheat harvest continues to restrain the growth of prices for European wheat which will have to compete harshly with Black Sea wheat. Wheat harvesting in France is delayed due to precipitation and according to FranceAgrimer, by July 5, only 1% of wheat crops were harvested compared to 10% last year, and durum wheat was harvested on only 15% of the area compared to 33% last year.
September prices of flour wheat on the Paris matif Exchange rose by €1.75 to €199.00/ton or € 235.98/ton.
The purchase by the state agency of Saudi Arabia (SAGO) of 505 thousand tons of food wheat of presumably Black Sea origin at a price of about 2 287/ton CFR for delivery in October also put pressure on the prices of European wheat.
