A surprise from the USDA and the intention of Russia to introduce duties surprised the wheat market
Analysts expect the December balance USDA wheat any surprises, but the sharp decline in estimates of world ending stocks surprised the market, which is expected to increase. Along with the news about the consideration by the Russian authorities the possibility to introduce quotas on grain exports and the export duty on sunflower to stabilize domestic food prices, this has led to an increase in trading prices for wheat by 2-2,5%.
In comparison with the previous WASDE report, the experts once again increased the forecast of world wheat production by 1.3 million tons to a record 773,66 million tonnes by 8.76 million tonnes will exceed the level 2019/20 MG, in particular for Australia and 1.5 million tonnes to 30 million tonnes and Russia by 0.5 million tons to 84 million tons For Argentina, the forecast harvest left 18 million tons, although local analysts estimate it at 16.8 million tons.
the Forecast of world consumption of wheat has sharply increased by 5.1 million tonnes to 757,8 million tons due to increased use of wheat for feed in China, a 3 million tonnes to 24 million tonnes in the EU by 0.5 million tonnes to 49 million tonnes due to high prices of corn.
Estimate of world corn trade in 2020/21 MG increased by 2.9 million MT to 193.7 million tonnes due to the increase in the export forecast for Australia by 1 million tonnes to 20 million tonnes, Canada – 1 up to 26 million tonnes, Russia by 0.5 million tons to 40 million tons, USA – 0.27 to 26.81 million tons.
the Forecast for world imports of wheat increased by 1.57 million tonnes to 189,19 million tonnes, thanks to increased purchases by China and Pakistan, 0.5 million tons each. In comparison with the previous season, China has ramped up imports of wheat from 5.38 to 8.5 million tons, so imports are the largest since 1995/96 MG. Pakistan has been importing wheat to boost reserves and reduce inflation in food prices. Import of 2.5 million tonnes will be the highest with indicator of 2008/09 marketing year.
Due to a sharp increase in the consumption estimate of world ending wheat stocks in 2020/21 MG decreased by 3.9 million tonnes to 316.5 million t (300,6 million t in 2019/20 MG), which remains at a record level. The analysts expected an increase of stocks by 2 million tonnes to 322 million tonnes. China's share in the total volume of ending stocks of wheat is 51% or 161,1 mln t and in India - 10% of the 31.1 million tons.
For India, the forecast of reserves and exports (at the level of 1 mln tonnes) in the near future can revise by increasing shipments to Bangladesh and other Asian countries.
