Wheat. World Markets and Trade. December 2016 – USDA Dec. 9, 2016
Global and Australian production in 2016/17 are both raised to new records. Global trade is boosted to a new record with stronger import demand from Asia and Brazil. Larger exports for Australia and Argentina are partially offset by a decrease for Russia. The U.S. season-average farm price is unchanged at $3.70 per bushel.
Prices for most wheat classes declined moderately in November, pressured by abundant global supplies. Overall, Hard Red Winter (HRW) declined $10/ton to $183, while Soft Red Winter (SRW) decreased $12/ton to $175. Soft White Winter (SWW) lost $7/ton to $188. On the other hand, Hard Red Spring (HRS) is up $4/ton to $253 this month as higher-protein wheat is in relatively tight supply globally
AUSTRALIAN WHEAT SITUATION
Australian exports for trade year 2016/17 are now forecast at a near-record 23.0 million metric tons, up about 45 percent from the previous year. Australia is a key supplier to several fast-growing Asian markets and is now forecast to have the highest exports in 5 years. Exportable supplies are massive because of a record crop, which is now forecast at 33.0 million tons. Despite higher exports and domestic consumption, stocks will continue to grow, augmenting the already burdensome global stocks and pressuring prices.
TRADE CHANGES IN 2016/17
- Argentina up 200,000 tons to 8.2 million based on the fast pace of old-crop shipments.
- Australia is boosted sharply by 2.5 million tons to 23.0 million due to larger production and competitive pricing.
- Russia is lowered 1.0 million tons to 29.0 million due to slower-than-expected trade.
- Bangladesh is raised 400,000 tons to 5.1 million on a stronger pace of trade.
- Brazil is up 400,000 tons to 7.0 million with food use expected to rebound.
- Indonesia is boosted 300,000 tons to 8.8 million on trade to date and rising food use.
- Thailand is raised 200,000 tons to 3.8 million based on the pace of trade.
- Vietnam is up 300,000 tons to 3.3 million based on stronger trade and higher expected feed and residual use.