The global wheat market is well supplied. Wheat prices continue to fall.

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the global wheat market is well supplied. Wheat prices continue to fall.

2014-05-26 09:34 |
source: China Grain Network |

in the week ending May 23, 2014, the global wheat market price fell moderately, mainly because the global wheat supply was still huge, and the winter wheat producing areas in the United States ushered in favorable rainfall, which helped to improve the winter wheat crop conditions.

On Friday, July 2014 soft red winter wheat futures on the Chicago Board of Trade fell 21.75 cents from a week earlier to close at 652.50 cents a bushel. The spot price of US Bay 2 soft red winter wheat is 692.5 to 695.5 cents per bushel, down from 730.25 to 734.25 cents per bushel for a week. November flour wheat closed at 195.25 euros a tonne on the European Union's Euronext exchange, down 4 euros from a week earlier. September wheat futures on the Zhengzhou Commodity Exchange closed at 2629 yuan, down 13 yuan from a week ago.

First, let's look at the state of the winter wheat crop in the United States. The U.S. Department of Agriculture's crop progress report showed that in the week ending May 18, the situation of winter wheat crops in the United States continued to deteriorate, with an excellent and good rate of 29%, which was 1 point lower than a week ago. In Kansas, the number one wheat producing area, the rate of good winter wheat is one point lower than it was a week ago. Among them, 1% is excellent and 11% is good. In terms of heading rate, as of May 18, the proportion of winter wheat entering heading stage in the United States was 57%, higher than 44% a week ago and 41% in the same period last year, but lower than the average progress of 58% in the same period of five years. U.S. spring wheat sowing was 49%, up from 34% a week ago, but lower than 64% in the same period last year and 68% behind the average sowing progress in the same period of five years. However, as the meteorological agency predicts that there will be beneficial rainfall in the main wheat producing areas of the United States, it will help stabilize the situation of winter wheat crops, which will put negative pressure on wheat prices.

In addition, the global supply of wheat is sufficient, and the price of wheat in the United States has risen sharply due to the drought in the southern plains, resulting in the lack of competitiveness of US wheat in the international market, which also puts pressure on US wheat prices. At the wheat import bidding meeting held in Iraq, the cheapest US wheat price was 378.95 US dollars/ton, which was much higher than the Russian wheat price of 324.55 US dollars, while the Canadian wheat price was 344.74 US dollars and the Australian wheat price was 371 US dollars.

Judging from the situation in the Black Sea region, data from the Russian Agricultural Market Research Institute (IKAR) show that the price of new Russian wheat fell last week. The price of new Russian wheat with a protein content of 12.5 was US $265 per ton, down from US $270 a week ago, FOB price. The reason is that rival Ukraine's wheat exports have not been hurt by the country's political crisis and buyers are still sourcing Ukrainian wheat. Egypt bought 60000 tons of Ukrainian wheat last Friday, with the ship scheduled for June 20-30.

Finally, let's look at the EU situation. According to the May report released by the European Commission, the output of wheat (excluding durum) in the 28 EU countries in 2014/15 (July to June of the following year) is expected to be 0.1359 billion tons, compared with 0.1343 billion tons last year. The European Commission expects EU wheat exports to be 22 million tons in 2014/15, compared with 27 million tons in the previous year. Domestic consumption is expected to be 0.1137 billion tons, compared with 0.1076 billion tons in the previous year. The feed consumption is expected to be 49.6 million tons, compared with 43.8 million tons last year. The EU's final stock of wheat in 2014/15 is expected to be 11.9 million tons, compared with 9.5 million tons in the previous year.