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 USDA. Show all posts
Showing posts with label USDA. Show all posts
Thursday, October 1, 2009
Monday, January 12, 2009
Wheat Prices Fall to Exchange Limit on Rising Supply
While wheat didn't revise estimates near as much as corn, global projections still rose 0.7 percent to 148.4 million metric tons by the close of the marketing year on May 31, according to the USDA.
Estimates are there will be a surplus of U.S. wheat of 655 million bushels - an increase of 5.1 percent - by May 31. That will be over double the 306 million bushels available last year.
December wheat inventories in the U.S. increased by 26 percent to 1.422 billion bushels on December 1, a 26 percent increase over last year's 1.132 billon bushels.
Wheat futures for March delivery dropped 59.75 cents, or 9.5 percent, to $5.6975. Earlier in the session it dropped to its 60 cents limit.
From September to December, farmers planted 42.098 million acres, down from the 46.281 acres in 2007.
Estimates are there will be a surplus of U.S. wheat of 655 million bushels - an increase of 5.1 percent - by May 31. That will be over double the 306 million bushels available last year.
December wheat inventories in the U.S. increased by 26 percent to 1.422 billion bushels on December 1, a 26 percent increase over last year's 1.132 billon bushels.
Wheat futures for March delivery dropped 59.75 cents, or 9.5 percent, to $5.6975. Earlier in the session it dropped to its 60 cents limit.
From September to December, farmers planted 42.098 million acres, down from the 46.281 acres in 2007.
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.
Tuesday, October 28, 2008
Good Condition of U.S. Winter Wheat Crop Causes Prices to Drop
The U.S. Department of Agriculture report was so good for wheat, that it has exceeded last year's condition by a whopping 55 percent for the same time frame.
As of October 26, 65 percent of winter wheat was in either good or excellent condition said the USDA report.
With the plethora of wheat available, wheat futures dropped 15.5 cents to $5.14 a bushel on the Chicago Board of Trade.
Much of this abundance came because farmers saw the amazing price of $13.495 a bushel on February 27, and so planted far too much, thinking it would profit them. Unfortunately, they never seem to learn that once the price has elevated to such levels, there was no way it could continue on because of the obvious surge in planting, which would ultimately drive the prices down, as supply increased. That, of course, is what has happened.
Another key factor has been the abundance of rain, which along with the huge sowing, has produced a huge crop.
Global wheat harvests could increase by 11 percent to reach a record of 680.2 million tons. It's also estimated that stockpiles around the world could grow by 21 percent to 144.4 million tons, according to the USDA.
As of October 26, 65 percent of winter wheat was in either good or excellent condition said the USDA report.
With the plethora of wheat available, wheat futures dropped 15.5 cents to $5.14 a bushel on the Chicago Board of Trade.
Much of this abundance came because farmers saw the amazing price of $13.495 a bushel on February 27, and so planted far too much, thinking it would profit them. Unfortunately, they never seem to learn that once the price has elevated to such levels, there was no way it could continue on because of the obvious surge in planting, which would ultimately drive the prices down, as supply increased. That, of course, is what has happened.
Another key factor has been the abundance of rain, which along with the huge sowing, has produced a huge crop.
Global wheat harvests could increase by 11 percent to reach a record of 680.2 million tons. It's also estimated that stockpiles around the world could grow by 21 percent to 144.4 million tons, according to the USDA.
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.
Thursday, September 4, 2008
Australia Should Still have Bumper Wheat Crop in Spite of Drought
Even though some areas in Australia may experience a drop in wheat production because of an ongoing drought, overall the country is expected to enjoy a huge increase in exports in contrast to previous years.
The USDA projects about a 25 million ton harvest in 2008-09, in comparison to 13 million tons in 2007. That amount (25 million tons) is expected to be revised down in the next USDA report. Even so, Russell Phillips, general manager, Australian department of agriculture, fisheries and forestry, said he thinks the country could end up exporting about 16 million tons this year.
The new Australian export regulator, Wheat Exports Australia (WEA), has accredited five companies for exports so far, as Cargill Australia Ltd, Elders Toepfer Grain Pty Ltd, Goodman Fielder Consumer Foods Pty Ltd, Grain Pool Pty Ltd and OzEpulse Pty Ltd made the first cut.
Former export regulator Australian Wheat Board (AWB) was replaced after a scandal caused them to be replaced. Still, they have applied to the WEA for accreditation this week and are waiting for a reply. The AWB was cited for taking illicit payments from the former Iraqi government of Saddam Hussein.
Globally, wheat is expected to reach record levels of 670.8 million tons by May 31, 2009, up by 9.9 percent over last year. Stockpiles could surge by 18 percent to 136.2 million tons, according to the USDA.
Saturday, August 2, 2008
Kansas City Board Of Trade Wheat Volume Third Largest In July
The Kansas City Board of Trade trading volume for the month of July ended at 300,025 contracts in the hard red winter wheat futures contract, which makes it the third-largest trading volume for the month of July, although far behind 407,032 contracts in 2007 and 377,494 contracts in 2006.
Price volatility continues, as during the month of July, the nearby contract traded in a range of 98 cents, as low as $8.07 and as high as $9.05. During that same period of time in 2007, the price range was 83 1/2 cents, with lows reaching $5.73 and highs $6.56 1/2. On Monday, the USDA projected the hard red winter wheat harvest was 79 percent complete. KCBT floor traders think it's a little further along, estimating HRW wheat harvest at 80 to 85 percent complete.
Price volatility continues, as during the month of July, the nearby contract traded in a range of 98 cents, as low as $8.07 and as high as $9.05. During that same period of time in 2007, the price range was 83 1/2 cents, with lows reaching $5.73 and highs $6.56 1/2. On Monday, the USDA projected the hard red winter wheat harvest was 79 percent complete. KCBT floor traders think it's a little further along, estimating HRW wheat harvest at 80 to 85 percent complete.
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