Global wheat supply is abundant and competitive market prices are falling.

As of the week of June 19, 2015, the global wheat market prices mostly fell, continuing the rise of last week, mainly due to sufficient global wheat supply, fierce competition in the export market and sluggish demand. In addition, the weather in the winter wheat producing areas of the United States tends to be dry, which helps farmers to speed up the harvest of winter wheat and is also detrimental to wheat prices.

On Friday, the July 2015 soft red winter wheat futures on the Chicago Board of Trade (CBOT) fell 15.25 cents from a week ago to 488.50 cents per bushel. The July hard red winter wheat futures on the Kansas City Futures Exchange (KCBT) closed at 503.25 cents per bushel, down 22.75 cents from a week ago. The July hard red spring wheat futures on the Minneapolis Grain Exchange (MGEX) closed at 543 cents, down 18.25 cents from a week ago. The September 2015 flour wheat period on the EU Euronext exchange closed at about 178.50 euros, down 1.75 euros from a week ago. The seller of Argentine spot wheat (12% protein content) quoted US $226 per ton, the same as last week, FOB price. The September 2015 wheat futures of Zhengzhou Commodity Exchange closed at 2,564 yuan per ton, down 28 yuan from a week ago.

The U.S. Department of Agriculture predicted last week that the global wheat ending stock in 2015/16 would be 0.2024 billion tons, slightly lower than the 0.203 billion tons predicted last month, but still higher than the already huge stock of 0.2004 billion tons last year and 0.18998 billion tons in 2013/14.

Harvesting of winter wheat in the United States has begun. Recently, the weather has continued to rain, and excessive rainfall in some areas has delayed the progress of wheat harvest. However, the weather forecast said that the weather in the Great Plains of the United States will tend to be dry, which will help farmers harvest winter wheat crops, triggering long profits to unwind and sell. According to the crop weekly report released by the US Department of Agriculture, as of June 14, the harvest of winter wheat in the United States had been completed by 11%, compared with 4% last week and 15% in the same period last year, with an average progress of 20% in five years.

From the perspective of U.S. wheat exports, according to the weekly export sales report released by the U.S. Department of Agriculture, as of the week of June 11, 2015, the net sales volume of U.S. wheat in 2015/16 was 315,700 tons, slightly lower than the 376700 tons a week ago. As of June 11, total U.S. wheat export sales (shipped and unloaded) in 2015/16 were 5.0473 million tons, down 26.9 percent from a year earlier. The USDA currently expects to export 48.31 million tons in 2015/16 and 49.26 million tons in 2014/15.

In Australia, due to the possibility of dry weather in eastern Australia due to El Nino phenomenon and the possible reduction of wheat planting area, the Australian Bureau of agricultural resources and economic science this week predicted that Australia's wheat production in 2015/16 would be 23.6 million tons, slightly lower than 23.67 million tons in the previous year, which would also be the second consecutive year of decline in Australian wheat production. ABARES had earlier expected a wheat yield of 24.4 million tons.

In Russia, Russian wheat prices remained stable last week. Despite the bright outlook for production, it is still difficult to resolve market concerns about wheat export tariffs. The Russian government will implement new wheat export tariffs from July 1. If the ruble weakens in the next few months, the new floating export tariffs could threaten the pre-sale profits of Xinmai, analysts said. According to IKAR, a Russian agricultural consulting agency, as of the end of last week, Russia's new wheat quotation (protein content 12.5) was US $190 per ton, FOB price, which was also stable for the third consecutive week.

2015/6/24 Source: Food Industry Network