The sixth straight quarterly drop by wheat is the longest losing streak in a minimum of 50 years, as global supply far exceeds demand, continuing to put downward pressure on wheat prices.
According to USDA data, global wheat stockpiles have increased by 10 percent to reach 186.6 million tons during 2009-2010. Oveall production could reach as high as 663.7 tons, only behind last year's 682.3 million tons.
With many other countries focusing on increasing their own domestic wheat supplies, imports have plunged to 121.1 million tons from the 141.2 million tons at the same time last year.
As of mid-September, only 10.5 million metric tons of wheat, or 386 bushels was ordered by foreign buyers, a huge decrease of 36 percent from a year ago.
Wheat supply and prices - Wheat prices going down
Showing posts with label US Wheat. Show all posts
Showing posts with label US Wheat. Show all posts
Thursday, October 1, 2009
Monday, December 22, 2008
Cold Weather Drives Up Weekly Wheat Prices
With the bulls concerned over the first strong cold weather of the season possibly may damage the dormant wheat crops, prices for the week ended up.
Even though Friday prices were softer, the overall week had KCBT wheat rising by 44.75 cents to $5.83 a bushel, MGE grew by 35.25 cents to $6.2525 a bushel and March CBOT led them all, gaining 50.25 cents to finish the week at $5.6325.
Although there was worries over the weather, a number of meteorologists suggested the cold spell probably wouldn't do enough damage to the crops to make much of a difference. Even so, prices rose on the possibility.
Weather will be especially rough in the central and southern Plains, with below-zero forecasts in the mix. Some of the concern was directed to areas that had little or no snow to protect from the bitterly cold temperatures.
Of course it won't be known until the spring if the dormant crop really had any damage to it, so it's a wait-and-see game at this time.
Spring wheat traded on the MGE hasn't been planted yet.
Even though Friday prices were softer, the overall week had KCBT wheat rising by 44.75 cents to $5.83 a bushel, MGE grew by 35.25 cents to $6.2525 a bushel and March CBOT led them all, gaining 50.25 cents to finish the week at $5.6325.
Although there was worries over the weather, a number of meteorologists suggested the cold spell probably wouldn't do enough damage to the crops to make much of a difference. Even so, prices rose on the possibility.
Weather will be especially rough in the central and southern Plains, with below-zero forecasts in the mix. Some of the concern was directed to areas that had little or no snow to protect from the bitterly cold temperatures.
Of course it won't be known until the spring if the dormant crop really had any damage to it, so it's a wait-and-see game at this time.
Spring wheat traded on the MGE hasn't been planted yet.
Monday, November 10, 2008
Where is Wheat Price Per Bushel Going in 2009
Wheat ending stocks for 2008-2009 are slightly higher than trade estimates of 594 million-bushel-average, as well as the 601 million-bushel average the USDA projected for October.
The overall global wheat production has risen, while some individual countries fluctuate. Argentina for example announced its production fell by 1 million metric tons to 11 million, while India has had such a good wheat harvest this year they're making two million tons of available for export.
Wheat supplies will also put competitive pressure on corn because of the large supply this year.
Because of the huge supply, there won't be much happening with wheat that will surprise anyone.
As far as prices, soft red winter wheat has "the most downside room; some of better classes can hold in a bit more strongly."
The global wheat market will continue to be bearish, even as drought conditions pressure certain countries like the Phillipines, Argentina and most recently China. Even with that pressure, the price for wheat per bushel in 2009 shouldn't be affected too much, and it shouldn't be counted on to push up wheat prices a bushel anytime soon.
There will be plenty of wheat for sale, and that will keep wheat prices per barrel down, as the huge wheat surplus this year, especially in the European Union and Black Sea region being major contributing factors. There has also been a huge wheat crop in Canada this year to add to the overall wheat picture.
Considering India wheat being so prolific this year as well, and you see how wheat prices per barrel in 2009 will struggle to rise, even when you take into account quality wheat. In these types of economic downturns, survival is more important than the protein content of wheat, and being able to afford the cost of food in general, and wheat in particular is the guiding factor behind where prices of wheat per barrel will lead to.
It's hard to tell how much wheat will be planted in 2009 as well, with fertilizer costs playing a big factor in the decision of whether to plant, and if wheat is planted, how much fertilizer can be used for the wheat and still be cost effective. Fertilizer prices have gone down some, but low wheat prices per barrel make it difficult to top dress wheat with nitrogen fertilizer and still be profitable in a meaningful way for those putting their wheat up for sale.
The most recent projections for wheat exports from the USDA stand at 210 million bushels, an extraordinary third less than 2008. And as of January 1, wheat sales have plunged by close to 40 percent, with only 158 million bushels sold in the U.S.
While there is some opportunity for wheat exports and wheat prices per barrel to rise in 2009, it will depend mostly on weather conditions for the U.S. wheat crop, along with the number of acres planted after a fairly poor year. The high protein sector may offer some opportunity for U.S. farmers, but wheat quality from other countries, and the above-mentioned factors will determine the price per bushel of wheat in 2009. There's no way of knowing at this time where all this will head, as weather is the key factor, and that of course has yet to be played out. Other countries have suffered quality wheat production, which could help wheat prices per bushel rise, but that will highly depend on the quality of wheat produced in the U.S., which again, will be determined by the weather conditions in the spring months of 2009.
The overall global wheat production has risen, while some individual countries fluctuate. Argentina for example announced its production fell by 1 million metric tons to 11 million, while India has had such a good wheat harvest this year they're making two million tons of available for export.
Wheat supplies will also put competitive pressure on corn because of the large supply this year.
Because of the huge supply, there won't be much happening with wheat that will surprise anyone.
As far as prices, soft red winter wheat has "the most downside room; some of better classes can hold in a bit more strongly."
The global wheat market will continue to be bearish, even as drought conditions pressure certain countries like the Phillipines, Argentina and most recently China. Even with that pressure, the price for wheat per bushel in 2009 shouldn't be affected too much, and it shouldn't be counted on to push up wheat prices a bushel anytime soon.
There will be plenty of wheat for sale, and that will keep wheat prices per barrel down, as the huge wheat surplus this year, especially in the European Union and Black Sea region being major contributing factors. There has also been a huge wheat crop in Canada this year to add to the overall wheat picture.
Considering India wheat being so prolific this year as well, and you see how wheat prices per barrel in 2009 will struggle to rise, even when you take into account quality wheat. In these types of economic downturns, survival is more important than the protein content of wheat, and being able to afford the cost of food in general, and wheat in particular is the guiding factor behind where prices of wheat per barrel will lead to.
It's hard to tell how much wheat will be planted in 2009 as well, with fertilizer costs playing a big factor in the decision of whether to plant, and if wheat is planted, how much fertilizer can be used for the wheat and still be cost effective. Fertilizer prices have gone down some, but low wheat prices per barrel make it difficult to top dress wheat with nitrogen fertilizer and still be profitable in a meaningful way for those putting their wheat up for sale.
The most recent projections for wheat exports from the USDA stand at 210 million bushels, an extraordinary third less than 2008. And as of January 1, wheat sales have plunged by close to 40 percent, with only 158 million bushels sold in the U.S.
While there is some opportunity for wheat exports and wheat prices per barrel to rise in 2009, it will depend mostly on weather conditions for the U.S. wheat crop, along with the number of acres planted after a fairly poor year. The high protein sector may offer some opportunity for U.S. farmers, but wheat quality from other countries, and the above-mentioned factors will determine the price per bushel of wheat in 2009. There's no way of knowing at this time where all this will head, as weather is the key factor, and that of course has yet to be played out. Other countries have suffered quality wheat production, which could help wheat prices per bushel rise, but that will highly depend on the quality of wheat produced in the U.S., which again, will be determined by the weather conditions in the spring months of 2009.
Friday, October 10, 2008
U.S. Department of Agriculture's Supply/demand Report Raises 2008-09 Wheat Carryout Estimate
The U.S. Department of Agriculture's supply/demand report on wheat carryout surprised a number of industry analysts, as they were looking for carryout to fall, as overseas demand and increased usage for feed generated the assumption carryout would decrease.
On the contrary, government estimates for 2008-09 wheat carryout increased from 574 million bushels to 601 million.
The major reason for all this is even with increased demand and domestic usage, wheat production has been so high that it offset the other two factors.
With acreage for wheat use already expanded for the 2008-09 season based on high wheat prices, it will be a challenge to maintain those prices as production increases even more than this year.
According to the USDA, global wheat production is estimated at 680.2 million tons, a record crop.
All of this isn't a big surprise of course, as we all knew there was going to be a huge crop, the surprise is in the increase of the carryout rather than decline.
On the contrary, government estimates for 2008-09 wheat carryout increased from 574 million bushels to 601 million.
The major reason for all this is even with increased demand and domestic usage, wheat production has been so high that it offset the other two factors.
With acreage for wheat use already expanded for the 2008-09 season based on high wheat prices, it will be a challenge to maintain those prices as production increases even more than this year.
According to the USDA, global wheat production is estimated at 680.2 million tons, a record crop.
All of this isn't a big surprise of course, as we all knew there was going to be a huge crop, the surprise is in the increase of the carryout rather than decline.
Friday, September 26, 2008
US Wheat Follows Other Commodities Down
With no fresh news on underlying wheat fundamentals, the grain followed other commodities down based on the unsurety of the economic bailout of the financial sector in the U.S.
December wheat at the Chicago Board of Trade fell by 20 1/4 cents to $7.16 a bushel as investors held back with the weekend coming up and the economic uncertainty.
The Kansas City Board of Trade followed suit as it came under pressure as well. December wheat fell by 19 1/2 cents to $7.16 a bushel.
There were also concerns about demand needing to increase after Egypt and Iran decided to acquire wheat from Russia this week.
As usual, the Minneapolis Grain Exchange followed in the footsteps of its CBOT cousin, also experiencing a decline to $7.89 3/4 a bushel, a 16-cent fall.
Traders are looking for direction from the quarterly grain stocks and small grain reports by the U.S. Department of Agriculture at 8:30 a.m. EDT Tuesday. Although an estimate, it'll help give a better picture on the actual usage of the grain.
It is thought at this time that the report will say wheat production for August fell from the expected 2.462 billion bushels originally estimated to 2.459 billion bushels.
December wheat at the Chicago Board of Trade fell by 20 1/4 cents to $7.16 a bushel as investors held back with the weekend coming up and the economic uncertainty.
The Kansas City Board of Trade followed suit as it came under pressure as well. December wheat fell by 19 1/2 cents to $7.16 a bushel.
There were also concerns about demand needing to increase after Egypt and Iran decided to acquire wheat from Russia this week.
As usual, the Minneapolis Grain Exchange followed in the footsteps of its CBOT cousin, also experiencing a decline to $7.89 3/4 a bushel, a 16-cent fall.
Traders are looking for direction from the quarterly grain stocks and small grain reports by the U.S. Department of Agriculture at 8:30 a.m. EDT Tuesday. Although an estimate, it'll help give a better picture on the actual usage of the grain.
It is thought at this time that the report will say wheat production for August fell from the expected 2.462 billion bushels originally estimated to 2.459 billion bushels.
Thursday, August 21, 2008
Wheat Climbs to Eight-week High On Weak Dollar, Surge in Crude Oil
Wheat enjoyed a comeback on Thursday, as it reached an eight-week high, as crude oil helped lift it up, along with a weakening U.S. dollar. Corn and soybean increases also helped push the commodity upwards.
On the CBOT, December wheat ended the session up 22 3/4 cents at $9.22 1/4 a bushel. December wheat at the Kansas City Board of Trade finished at 23 1/2 cents higher at $9.50 3/4, while December wheat at the Minneapolis Grain Exchange ended the session at $9.82 1/4, a 27 1/4 cent increase.
U.S. wheat export demand should remain strong, as weekly export sales for 2008-09 for the U.S. is at a marketing year high of 916,500 tons. The average of 522 million bushels of export wheat sales is about 10 percent above the five-year average. Wheat shipments are running at about 37 percent higher than the five-year average.
On the CBOT, December wheat ended the session up 22 3/4 cents at $9.22 1/4 a bushel. December wheat at the Kansas City Board of Trade finished at 23 1/2 cents higher at $9.50 3/4, while December wheat at the Minneapolis Grain Exchange ended the session at $9.82 1/4, a 27 1/4 cent increase.
U.S. wheat export demand should remain strong, as weekly export sales for 2008-09 for the U.S. is at a marketing year high of 916,500 tons. The average of 522 million bushels of export wheat sales is about 10 percent above the five-year average. Wheat shipments are running at about 37 percent higher than the five-year average.
Tuesday, August 19, 2008
Wheat Outlook and News
US Wheat Review: Slumps In Setback; Consolidation Seen
Wheat Rises as Dry Spell May Curb Australia Crop for Third Year
India May Harvest Record Wheat Crop on Rainfall
Kansas Wheat Report: 2008 Quality Above Average
WA gets new wheat export market
Wheat outlook good in North Dakota
Wheat was once a diplomatic tool
Manitoba crop report: showers delay harvest
Exports of cereals (Romania) climb to 132 million euros
Wheat Rises as Dry Spell May Curb Australia Crop for Third Year
India May Harvest Record Wheat Crop on Rainfall
Kansas Wheat Report: 2008 Quality Above Average
WA gets new wheat export market
Wheat outlook good in North Dakota
Wheat was once a diplomatic tool
Manitoba crop report: showers delay harvest
Exports of cereals (Romania) climb to 132 million euros
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