WHEAT: WORLD MARKETS AND TRADE

OVERVIEW

Global production in 2016/17 is raised to a new record. Larger crops in Australia, Brazil, Canada, India, and Kazakhstan more than offset lower production in China and the EU. Global trade is up month-to-month but just slightly lower than last year's record. The upward revision is based primarily upon larger projected imports for the EU and Syria and more than offsets cuts in Brazil, Indonesia, South Africa, and Thailand. Exports are raised for Australia, Brazil, Kazakhstan, Serbia, and Ukraine and lowered for the EU. U.S. imports and exports are unchanged. The U.S. season-average farm price is lowered 10 cents to $3.60 per bushel.

U.S. PRICES:

Prices for Soft Red Winter (SRW) and Hard Red Winter (HRW) classes climbed moderately through mid-August before dropping in the latter half of the month. Global quality concerns and reluctant farmer selling led to the initial strengthening of prices, but ample global supplies pressured prices lower. Overall, HRW slid $9 to $168/ton, while SRW ultimately fell $14 to $177/ton. Hard Red Spring (HRS) climbed $13 to $243/ton as high protein premium supplies tighten. Soft White Winter (SWW) ended the month up $9 to $204/ton as quality concerns persist.

TRADE CHANGES IN 2016/17

Selected Exporters

  • Australia is raised 1.0 million tons to 19.5 million based on a larger crop. Australia has become more competitive in the region and will regain market share in Southeast Asia as supplies tighten in Argentina.
  • Brazil is up 500,000 tons to 1.5 million on a larger crop.
  • EU is cut 1.0 million tons to 26.0 million on a significant reduction in the German crop, thus limiting exportable supplies. Germany is the second-largest exporter in the EU.
  • Kazakhstan is raised 500,000 tons to 8.5 million due to a larger crop.
  • Serbia is lifted 300,000 tons to 1.3 million on likely additional exports to the EU.
  • Ukraine is up 500,000 tons to 15.0 million on projected demand from the EU for feedquality wheat.

Selected Importers

  • EU is boosted 1.0 million tons to 7.0 million to reflect a smaller crop and likely greater demand for feed-quality wheat imports.
  • Indonesia is reduced 600,000 tons to 8.5 million as the government stopped issuing import recommendation letters for feed-quality wheat to encourage greater utilization of domestic corn.
  • South Africa is down 300,000 tons to 1.6 million due to large domestic supplies.
  • Syria is raised 1.0 million tons to 2.3 million on recent reports of pending large purchases.