Wheat. World Markets and Trade. October 2016 – USDA Oct. 12, 2016
Global production in 2016/17 is lowered slightly but remains a record. Larger crops in Australia, Brazil, and Canada are more than offset by cuts in the EU and the United States. Global trade is raised to a new record. The upward revision is based primarily on larger projected imports for Brazil, India, and the United States. Lower import demand in Egypt is partly offsetting. Exports are raised for Australia, Canada, Ukraine, and the United States. EU exports are cut again this month due to tighter supplies. The U.S. season-average farm price is up 10 cents to $3.70 per bushel.
During September, prices for Hard Red Winter (HRW), Hard Red Spring (HRS), and Soft Red Winter (SRW) classes jumped and continue to be supported by growing uncertainty over crop quality, particularly in Australia and Canada. Overall, HRS rose $23 to $264/ton, HRW climbed $15 to $195/ton, and SRW was up $16 to $186/ton. Soft White Winter (SWW) ended the month down $7 to $198/ton.
TRADE CHANGES IN 2016/17
- Australia is raised 1.0 million tons to 20.5 million based on a larger crop. Australia has become more competitive in the region as witnessed by strong sales in recent months.
- Canada is up 500,000 tons to 21.5 million on larger supplies and strong early-season shipments.
- EU is slashed 1.0 million tons to 25.0 million on large production cuts in major exporting countries, particularly France and Germany.
- Ukraine is up 500,000 tons to 15.5 million on recent large sales, particularly to India.
- United States is boosted 500,000 tons to 26.0 million on a strong early-season pace of sales and shipments.
- Brazil is raised 500,000 tons to 6.3 million on the strong pace of deliveries to date.
- Egypt is cut 400,000 tons to 11.8 million resulting from continuing efforts to reduce corruption in segments of the wheat industry. Imports had been substituted for domestic production and this will likely be curtailed to some extent.
- India is boosted 1.0 million tons to 3.0 million because the government lowered the import duty from 25 to 10 percent. Import prices are already much lower than domestic and the reduced duty should stimulate even more demand.
- United States is up 300,000 tons to 3.4 million due to the strong pace to date and larger expected imports from Canada over the coming months.