Lowering the forecast of global wheat production by IGC experts supported the markets
IGC experts in the August report lowered the forecast of global wheat production by 6 million tons to 782 million tons, which is still 9 million tons higher than last year's harvest. The forecast for World Trade was also lowered to 189 million tons and wheat consumption by 3 million tons to 783 million tons, as a result of which final reserves will be reduced by 2 million tons to 278 million tons, which is 1 million tons higher than last year's level.
Thus, the forecast for the wheat harvest in Canada was reduced from 28.5 to 24.5 million tons, in Russia – from 81 to 75 million tons, in the United States – from 47 to 46.2 million tons, while for Ukraine it was increased by 2.5 million tons and Australia by 1.2 million tons.
Global exchanges reacted to the decline in forecasts with an increase in quotations.
September US futures rose:
- by 5 5.14 / ton to Чикаго 266.4/ton for soft winter SRW wheat in Chicago,
- by 4 4.96 / ton to H 262.7/ton for hard winter HRW wheat in Kansas City,
- by 1 1.1/ton to.341.1 / ton for hard spring HRS wheat in Minneapolis.
Weekly export sales were lower than traders ' expectations and amounted to only 116 thousand tons, while actual exports for the week increased by 14% to 675.8 thousand tons, and in general in the season reached 5.011 million tons (out of the USDA forecast of 23.8 million tons), which is 15% lower than last year's pace.
Tender activity supports the prices of European and Black Sea wheat.
The Pakistani agency TSR purchased 160 thousand tons of food wheat for delivery in September – October at a price of 3 355.95/ton CFR, which is 5 51/ton higher than the purchase price at the previous auction on July 27.
Tunisia purchased only 50 thousand tons of wheat at the tender (out of the planned 100 thousand tons) for delivery in September – October at a price of 3 349.89-C 352.77/ton CFR.
The Turkish agency TMO will hold a tender for the purchase of 300 thousand tons of food wheat for delivery in September – October until September 2.
- September European wheat futures rose by €5.75/ton to €251/ton or.295/ton yesterday, while December futures rose by €3.5/ton to €247.5/ton or. 291.1/ton.
Wheat exports from the EU are accelerating, and 2.9 million tons have already been shipped this season (out of the USDA forecast of 35 million tons), compared with 2.67 million tons as of this date last year.
After a slight drop, Black Sea wheat futures on the Chicago Stock Exchange rose yesterday:
- September-by 4 4 / ton to 2 297.75 / ton,
- December-by 3 3.25/ton to 3 311 / ton.
Supply prices for Black Sea wheat remain at 2 285-300/ton FOB, while demand prices remain in the range of.270-275/ton FOB, so in the near future it will become clear whether sellers will be able to force buyers to raise prices.
