Wheat Inventory High
Stockpiles of wheat are leaving the industry reeling even more, as the largest inventory in over 20 years is emerging from the heavy wheat harvest.
Projections are there will be close to 1 billion bushels of wheat in the warehouses and bins when the harvest comes in; 20 million bushels beyond the estimates of the USDA.
The already low prices will drop even lower, as farmers continue to plant the grain based on prices from several years ago, rather than prevailing market conditions.
This is expected to finally correct the over-planting of wheat as farmers look to other areas to generate profits, as wheat hasn't been doing it for a few years.
The reasons for wheat being so abundant is lower exports as many countries are planting wheat and getting good results, and American consumers aren't consuming as much, driving domestic demand down. That and just too much wheat being planted is the issue driving the huge wheat inventory.
Wheat Inventory High
Showing posts with label Wheat Inventory. Show all posts
Showing posts with label Wheat Inventory. Show all posts
Wednesday, March 10, 2010
Thursday, October 1, 2009
Wheat in Sixth Quarterly Drop
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
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
Monday, August 10, 2009
Wheat Exports in Slow Start
Exports of U.S. wheat promise to be down significantly for 2009-2010, according to the USDA, as projections are for about 925 million bushels of wheat to export during that time period, where the marketing year began on June 1.
Assuming this is accurate, which it seems it's close, that would be 90 million less bushels of wheat exported this year over last, and a huge 339 million less than the 2007-2008 year.
At this pace it'll be the third worst year of wheat exports in 25 years.
Wheat export inspections for the first 9.6 weeks show that they're at 130.7 million bushels; almost 100 million bushels under last year at this time. The weekly average wheat inspection has been at an anemic 13.7 million bushels.
This is even far below the USDA export projection of 925 million bushels, as the average needed to reach that is 18.7 million bushels for the rest of the year, which will be difficult to attain.
While some say this isn't a good comparison over the very quick rate of wheat exports last year, it still is far behind what would be needed to reach projections. As fo the end of July, the USDA said outstanding export sales of wheat stood at 148 million bushels, while last year it was at 276 million bushels.
The USDA’s weekly U.S. Export Sales report breaks down exports and export sales by where the wheat is headed and by class of wheat. Through July 30, export commitments compared to those of last year plunged by 60 percent for hard red winter wheat, 63 percent for soft red winter wheat, and 26 percent for hard red spring wheat. Export commitments were 17 percent larger for white wheat and 15 percent larger for durum wheat. Commitments for all classes of wheat were down by a huge 46 percent.
Among its largest wheat trading partners, commitments have dropped significantly; 27 percent to the Philippines, 45 percent to Japan, 48 percent to Mexico, and 87 percent to Egypt. Egypt buys only soft red winter wheat from the U.S.
Exports of wheat globally are down this year because a number of countries have significantly increased wheat production domestically, so diminishing the amount of wheat needed for its citizenry outside the countries.
Much of the recent low wheat prices has been attributed primarily to the decline in export demand for soft red winter wheat, which doesn't look to change this year.
As far as wheat inventories globally, they are expected to grow by 8 percent this year, which equals 512 million bushels. Of that, China will account for 80 percent of the wheat inventory increase.
Assuming this is accurate, which it seems it's close, that would be 90 million less bushels of wheat exported this year over last, and a huge 339 million less than the 2007-2008 year.
At this pace it'll be the third worst year of wheat exports in 25 years.
Wheat export inspections for the first 9.6 weeks show that they're at 130.7 million bushels; almost 100 million bushels under last year at this time. The weekly average wheat inspection has been at an anemic 13.7 million bushels.
This is even far below the USDA export projection of 925 million bushels, as the average needed to reach that is 18.7 million bushels for the rest of the year, which will be difficult to attain.
While some say this isn't a good comparison over the very quick rate of wheat exports last year, it still is far behind what would be needed to reach projections. As fo the end of July, the USDA said outstanding export sales of wheat stood at 148 million bushels, while last year it was at 276 million bushels.
The USDA’s weekly U.S. Export Sales report breaks down exports and export sales by where the wheat is headed and by class of wheat. Through July 30, export commitments compared to those of last year plunged by 60 percent for hard red winter wheat, 63 percent for soft red winter wheat, and 26 percent for hard red spring wheat. Export commitments were 17 percent larger for white wheat and 15 percent larger for durum wheat. Commitments for all classes of wheat were down by a huge 46 percent.
Among its largest wheat trading partners, commitments have dropped significantly; 27 percent to the Philippines, 45 percent to Japan, 48 percent to Mexico, and 87 percent to Egypt. Egypt buys only soft red winter wheat from the U.S.
Exports of wheat globally are down this year because a number of countries have significantly increased wheat production domestically, so diminishing the amount of wheat needed for its citizenry outside the countries.
Much of the recent low wheat prices has been attributed primarily to the decline in export demand for soft red winter wheat, which doesn't look to change this year.
As far as wheat inventories globally, they are expected to grow by 8 percent this year, which equals 512 million bushels. Of that, China will account for 80 percent of the wheat inventory increase.
Thursday, June 4, 2009
Wheat News | Wheat Inventories in India to Remain Huge
Wheat
Wheat inventories in India are likely to remain large given the expectation of another bumper crop this year and limited export opportunities, said the Food and Agriculture Organization (FAO) of the United Nation in its latest report.
Inventory in India, another major producer and stockholder, is forecast to remain unchanged at a five-year high of 17.8 million tonnes. But another bumper year for wheat in 2010 may increase the inventory further, said the report. The forecast assumes significance as the country has not opened wheat for exports despite excessive supplies in the domestic market.
Since, the United Progressive Alliance government has been formed without any alliance pressure and most importantly, the inflation remains under control, trade sources estimate the government may allow wheat exports in near future primarily because of global trade deficit.
FAO’s first forecast for wheat trade in 2009-10 stands at 114 million tonnes, down as much as 8 per cent, or 10 million tonnes from the estimated 2008-09 record volume.
Wheat export was suspended in May 2007 to control inflation that shot up over 13 per cent. The government also suspended futures trading in wheat due to the fear of price rise on traders’ speculation.
Meanwhile, FAO has estimated India’s wheat production to decline marginally by one per cent to 77.6 million tonnes in 2009 on favourable climatic condition throughout the season.
The specialised agency of the United Nations, which leads international efforts to defeat hunger, has forecast global wheat output to decline by 4 per cent to 655.8 million tonnes in 2009 compared with 684.6 million tonnes in the previous year.
The agency estimates total course grains’ output to remain rangebound at 37.8 million tonnes this calendar year compared with 38 million tonnes in the last year.
But, the global coarse grains production is likely to decline by 4 per cent at 1,098.5 million tonnes this year compared with 1,142.3 million tonnes in the previous year.
The 2008 paddy season has just been completed with the harvesting of secondary crops in Asia. Boosted by excellent results of these crops, global paddy production is now estimated at 689 million tonnes, equivalent to 460 million tonnes of milled rice, well above earlier expectations and 4.3 per cent more than in 2007.
But the sector’s attention is now turning to the 2009 season, which is already well advanced in all but the critically important south-eastern Asian region, where farmers are awaiting the imminent arrival of the monsoon rains to plant their crops.
Preliminary information on plantings and crop development over the 2009 season has been favourable. As a result and assuming a normal rainfall pattern in Asia in the coming months, world production in 2009 could gain a further 1 per cent and reach 696 million tonnes (465 million tonnes, milled equivalent), FAO said.
The relatively moderate increase expected in 2009 reflects less attractive prospects for producer returns. However, in spite of financial constraints, many governments have maintained their support to the sector through input subsidies, investment programmes and direct price incentives, which, barring any major setback, is likely to sustain production growth.
Trade sources estimate India’s rice output to remain rangebound at 147 million tons in 2009 provided monsoon arrives in time and distributed evenly.
Wheat
Wheat inventories in India are likely to remain large given the expectation of another bumper crop this year and limited export opportunities, said the Food and Agriculture Organization (FAO) of the United Nation in its latest report.
Inventory in India, another major producer and stockholder, is forecast to remain unchanged at a five-year high of 17.8 million tonnes. But another bumper year for wheat in 2010 may increase the inventory further, said the report. The forecast assumes significance as the country has not opened wheat for exports despite excessive supplies in the domestic market.
Since, the United Progressive Alliance government has been formed without any alliance pressure and most importantly, the inflation remains under control, trade sources estimate the government may allow wheat exports in near future primarily because of global trade deficit.
FAO’s first forecast for wheat trade in 2009-10 stands at 114 million tonnes, down as much as 8 per cent, or 10 million tonnes from the estimated 2008-09 record volume.
Wheat export was suspended in May 2007 to control inflation that shot up over 13 per cent. The government also suspended futures trading in wheat due to the fear of price rise on traders’ speculation.
Meanwhile, FAO has estimated India’s wheat production to decline marginally by one per cent to 77.6 million tonnes in 2009 on favourable climatic condition throughout the season.
The specialised agency of the United Nations, which leads international efforts to defeat hunger, has forecast global wheat output to decline by 4 per cent to 655.8 million tonnes in 2009 compared with 684.6 million tonnes in the previous year.
The agency estimates total course grains’ output to remain rangebound at 37.8 million tonnes this calendar year compared with 38 million tonnes in the last year.
But, the global coarse grains production is likely to decline by 4 per cent at 1,098.5 million tonnes this year compared with 1,142.3 million tonnes in the previous year.
The 2008 paddy season has just been completed with the harvesting of secondary crops in Asia. Boosted by excellent results of these crops, global paddy production is now estimated at 689 million tonnes, equivalent to 460 million tonnes of milled rice, well above earlier expectations and 4.3 per cent more than in 2007.
But the sector’s attention is now turning to the 2009 season, which is already well advanced in all but the critically important south-eastern Asian region, where farmers are awaiting the imminent arrival of the monsoon rains to plant their crops.
Preliminary information on plantings and crop development over the 2009 season has been favourable. As a result and assuming a normal rainfall pattern in Asia in the coming months, world production in 2009 could gain a further 1 per cent and reach 696 million tonnes (465 million tonnes, milled equivalent), FAO said.
The relatively moderate increase expected in 2009 reflects less attractive prospects for producer returns. However, in spite of financial constraints, many governments have maintained their support to the sector through input subsidies, investment programmes and direct price incentives, which, barring any major setback, is likely to sustain production growth.
Trade sources estimate India’s rice output to remain rangebound at 147 million tons in 2009 provided monsoon arrives in time and distributed evenly.
Wheat
Friday, January 16, 2009
Wheat Prices Will Fall as Demand Dries Up
Some traders are looking for any tidbit of information to keep the wheat prices up, but I don't think they can hold for too long.
Much of the argument for wheat prices holding is the dry weather in a couple regions in South America.
But with prices higher now than the fundamentals warrant, it's hard to believe people seriously think losing a little bit of the global crop will really make much difference. There's so much wheat available that it would take something of epic proportions to keep prices up.
Even add in the possibility that the cold front in the U.S. may damage some wheat crop if there isn't any snow cover, and that still doesn't change the fact of the huge global supply available.
Most of what's been driving the prices up over the last couple months has been the re-entry of some funds into the market, along with the soybean rally. Over the last 6 weeks wheat futures have risen approximately 25 percent.
With demand so low, I don't see that being able to continue in any sustainable way in the months ahead.
The one unknown is when the U.S. dollar will start collapsing under the weight of the huge amounts of money being used to stimulate the U.S. economy. That would of course make exporting wheat much cheaper, and could increase sales.
The problem is there's no way of knowing how long that will take, so it can only be watched for, not counted on, as far as timing goes. When it does happen though, it will be a boon to commodity producers in the U.S.
Concerning demand, the USDA on Monday projected the ending stocks for U.S. wheat in 2008 - 2009 stand at 655 million bushels, an increase of 32 million from December's estimates. With nowhere to really send that wheat, as demand is so soft and wheat so plentiful, it will stay in storage until there's someone to sell it to.
Even that will continue to be a challenge as for the same time period, wheat consumption accroding to the USDA estimates, are being lowered.
Livestock markets have no interest at this time in buying either, as they're struggling as much as anyone else, with exports down and profits under pressure. Cost inputs and lower priced global wheat remains major factors in these decisions.
While there's nothing that can be done about it now, the real problem stems from last years' prices, where everything went right for U.S. wheat farmers, and supply was down globally. Farmers responded predictably by putting more wheat in the ground for this season, contributing in part to the current glut.
This wasn't too smart, as the chances of having two years in a row like that are almost nil, and they knew foreign farmers would respond the same at lower costs. Farmers, as well as anybody in business must learn if they missed it this time around, there's not much guarantee they hit it the next.
It's expected that spring wheat acreage planted this year will drop, especially if prices don't come back, which they are highly unlikely to do.
Much of the argument for wheat prices holding is the dry weather in a couple regions in South America.
But with prices higher now than the fundamentals warrant, it's hard to believe people seriously think losing a little bit of the global crop will really make much difference. There's so much wheat available that it would take something of epic proportions to keep prices up.
Even add in the possibility that the cold front in the U.S. may damage some wheat crop if there isn't any snow cover, and that still doesn't change the fact of the huge global supply available.
Most of what's been driving the prices up over the last couple months has been the re-entry of some funds into the market, along with the soybean rally. Over the last 6 weeks wheat futures have risen approximately 25 percent.
With demand so low, I don't see that being able to continue in any sustainable way in the months ahead.
The one unknown is when the U.S. dollar will start collapsing under the weight of the huge amounts of money being used to stimulate the U.S. economy. That would of course make exporting wheat much cheaper, and could increase sales.
The problem is there's no way of knowing how long that will take, so it can only be watched for, not counted on, as far as timing goes. When it does happen though, it will be a boon to commodity producers in the U.S.
Concerning demand, the USDA on Monday projected the ending stocks for U.S. wheat in 2008 - 2009 stand at 655 million bushels, an increase of 32 million from December's estimates. With nowhere to really send that wheat, as demand is so soft and wheat so plentiful, it will stay in storage until there's someone to sell it to.
Even that will continue to be a challenge as for the same time period, wheat consumption accroding to the USDA estimates, are being lowered.
Livestock markets have no interest at this time in buying either, as they're struggling as much as anyone else, with exports down and profits under pressure. Cost inputs and lower priced global wheat remains major factors in these decisions.
While there's nothing that can be done about it now, the real problem stems from last years' prices, where everything went right for U.S. wheat farmers, and supply was down globally. Farmers responded predictably by putting more wheat in the ground for this season, contributing in part to the current glut.
This wasn't too smart, as the chances of having two years in a row like that are almost nil, and they knew foreign farmers would respond the same at lower costs. Farmers, as well as anybody in business must learn if they missed it this time around, there's not much guarantee they hit it the next.
It's expected that spring wheat acreage planted this year will drop, especially if prices don't come back, which they are highly unlikely to do.
Wednesday, November 26, 2008
Wheat Harvest Already Breaks Record
Even though South Africa, Australia and Argentina haven't harvested their wheat yet, current wheat harvests around the world have already broken a global record.
Over the last three years worldwide consumption has been 22.9, 22.7, and 22.7 billion bushels. So far this year 23.3 billion bushels have been harvested.
If consumption is similar to the past years, we'll see ending stocks increase by about 900 million bushels.
Projections for wheat use in 2008-2009 are at close to 24.1 billion bushels. After South Africa, Australia and Argentina harvest their wheat, supply is expected to come in at around 25 billion bushels.
With farmers belatedly planting more wheat because of past performance, it has caused this surge of supply. Now with prices falling because of so much product, wheat production costs are higher than what wheat prices can bring.
Many wheat farmers need to understand that when a great year just ends, it probably is a signal that the next year will end up just like this one, as the obvious knee jerk reaction of planting more acres will happen, which will drive down prices.
Those investing in wheat also need to take this into account.
Over the last three years worldwide consumption has been 22.9, 22.7, and 22.7 billion bushels. So far this year 23.3 billion bushels have been harvested.
If consumption is similar to the past years, we'll see ending stocks increase by about 900 million bushels.
Projections for wheat use in 2008-2009 are at close to 24.1 billion bushels. After South Africa, Australia and Argentina harvest their wheat, supply is expected to come in at around 25 billion bushels.
With farmers belatedly planting more wheat because of past performance, it has caused this surge of supply. Now with prices falling because of so much product, wheat production costs are higher than what wheat prices can bring.
Many wheat farmers need to understand that when a great year just ends, it probably is a signal that the next year will end up just like this one, as the obvious knee jerk reaction of planting more acres will happen, which will drive down prices.
Those investing in wheat also need to take this into account.
Wednesday, November 5, 2008
Wheat Drops to Lowest Level in Three Weeks
The price of wheat in the U.S. fell to its lowest level in three weeks as traders aren't optimistic about the comming Department of Agriculture report on export sales data.
Expectations are the global crop will dampen the demand for American wheat, as production has increased in emerging countries.
Wheat that was inspected for export from the U.S. came in at about 13.2 million bushels for the week ending October 30, a drop of about 40 percent from the week ending October 23.
India is especially making an impact on exports this year, as it announced it will probably make about 2 million tons available on the export market. India could end up with a record wheat crop this year of 78.5 million tons.
Worldwide wheat production through June 30 is projected to leap by 12 percent to a record 683 million metric tons. That's the equivalent of about 25.1 billion bushels.
Wheat for December delivery dropped to $5.372 a bushel today on the Chicago Board of Trade.
Expectations are the global crop will dampen the demand for American wheat, as production has increased in emerging countries.
Wheat that was inspected for export from the U.S. came in at about 13.2 million bushels for the week ending October 30, a drop of about 40 percent from the week ending October 23.
India is especially making an impact on exports this year, as it announced it will probably make about 2 million tons available on the export market. India could end up with a record wheat crop this year of 78.5 million tons.
Worldwide wheat production through June 30 is projected to leap by 12 percent to a record 683 million metric tons. That's the equivalent of about 25.1 billion bushels.
Wheat for December delivery dropped to $5.372 a bushel today on the Chicago Board of Trade.
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.
Tuesday, October 7, 2008
US Wheat Plunges on Economic Fears and Pressure
Commodities continue to take a beating as the markets worldwide become under increasing pressure. Wheat suffered along with most others as they tumbled on all the exchanges.
Along with the economic conditions, other factors were the stronger U.S. dollar and the drop in price of soybeans and corn. A stronger U.S. dollar makes investments in commodities less attractive to foreign traders.
The outlook for 2008 through 2009 looks somewhat grim for wheat, as outside pressures of the global economy continue and the projected record wheat crop drives prices further down.
Along with U.S. wheat production, Canada is raising its wheat production forecast, as are many other countries.
Much of that is because of increased number of acres being planted in wheat as well as expected good weather conditions.
On the Chicago Board of Trade December wheat dropped by 45 cents to $5.95 1/4 a bushel for December. December wheat on the Kansas City Board of Trade fell 42 1/4 cents to $6.28 1/4 a bushel, while December wheat declined by 38 cents to $6.64 3/4 on the Minneapolis Grain Exchange.
Along with the economic conditions, other factors were the stronger U.S. dollar and the drop in price of soybeans and corn. A stronger U.S. dollar makes investments in commodities less attractive to foreign traders.
The outlook for 2008 through 2009 looks somewhat grim for wheat, as outside pressures of the global economy continue and the projected record wheat crop drives prices further down.
Along with U.S. wheat production, Canada is raising its wheat production forecast, as are many other countries.
Much of that is because of increased number of acres being planted in wheat as well as expected good weather conditions.
On the Chicago Board of Trade December wheat dropped by 45 cents to $5.95 1/4 a bushel for December. December wheat on the Kansas City Board of Trade fell 42 1/4 cents to $6.28 1/4 a bushel, while December wheat declined by 38 cents to $6.64 3/4 on the Minneapolis Grain Exchange.
Wednesday, September 17, 2008
Wheat Joins Commodity Rally as Investors Flee Equities
With the U.S. dollar falling and investors fleeing equities, the commodity market surged today as many of the dollar-denominated commodities enjoyed a significant uptick. Wheat was part of the swing.
Wheat futures in the U.S. increased by 5 percent Wednesday, moving up from its lowest level in over a year.
December wheat futures on the CBOT ended at $7.25-3/4 a bushel, up 35-3/4 cents, a 5.18 percent move upwards.
Even the news that Egypt decided to buy 205,000 tons of wheat from Ukraine and Russia wasn't enough to pressure the grain, as numerous economic factors lined up to give it a solid push forward.
High global wheat inventories have been putting downward pressure on wheat prices recently.
Wheat futures in the U.S. increased by 5 percent Wednesday, moving up from its lowest level in over a year.
December wheat futures on the CBOT ended at $7.25-3/4 a bushel, up 35-3/4 cents, a 5.18 percent move upwards.
Even the news that Egypt decided to buy 205,000 tons of wheat from Ukraine and Russia wasn't enough to pressure the grain, as numerous economic factors lined up to give it a solid push forward.
High global wheat inventories have been putting downward pressure on wheat prices recently.
Friday, April 25, 2008
Wheat Down 40 Percent from February High
Since the record price of wheat in February, prices have continued to fall as an expected large harvest has caused the golden grain to fall by 40 percent since the $13.50 a bushel record.
On the Chicago Board of Trade (CBOT) soft red winter wheat has plunged to $8.01 a bushel, the lowest since November 2007.
According to the International Grain Council, wheat will probably reach a record harvest of 645 million tons in 2008-09.
"The big rise in prices in 2007 and early 2008 was a strong incentive to increase the planting of wheat," said Sudakshina Unnikrishnan, an agricultural analyst at Barclays Bank.
"The market is pricing-in expectations of a bigger crop from summer onwards."
Government subidies by the U.S. and Europe for corn-based ethanol has been a major contributor to the price increases, as farmers over the last several years have taken acreage out of wheat production and put it into corn.
Wheat farmers will probably be a year too late to get the huge prices, as their huge harvest will cause price decreases, as is already being factored into the market.
Sunday, April 20, 2008
Global Wheat Production Expect to Increase 6%
A report from Utrecht, Netherlands-based Rabobank, says the global production for wheat should increase by 6 percent this year, making it a record harvest globally.
Motivating the higher output is the increasing prices of the commodity, based on growing food demand, investors, biofuels and feed for animals. Stockpiles around the world also plunged last year causing the grain to increase in price as well.
"Wheat production is forecast to rebound strongly, resulting in a partial recovery in world inventory levels and taking some pressure off world prices,' a team of analysts in Sydney, Australia, wrote in the report.
It is expected the harvest will bring in an additional 37 million metric tons to bring the total for the the year to 640 million tons. Stockpiles around the world should grow by 9 percent as a result.
This should help bring prices down during the second half of 2008 said the report, as production grows beyond demand by about 12 million tons.
Motivating the higher output is the increasing prices of the commodity, based on growing food demand, investors, biofuels and feed for animals. Stockpiles around the world also plunged last year causing the grain to increase in price as well.
"Wheat production is forecast to rebound strongly, resulting in a partial recovery in world inventory levels and taking some pressure off world prices,' a team of analysts in Sydney, Australia, wrote in the report.
It is expected the harvest will bring in an additional 37 million metric tons to bring the total for the the year to 640 million tons. Stockpiles around the world should grow by 9 percent as a result.
This should help bring prices down during the second half of 2008 said the report, as production grows beyond demand by about 12 million tons.
Thursday, April 17, 2008
Nations Continue to buy Domestic Wheat to Combat Inflation, High Food Prices
Nations continue to acquire domestic wheat from their farmers in an effort to boost reserves as food prices wreak havoc across the world.
India has bought 7 percent more wheat than usual from its domestic farmers, in an effort to combat inflation, which has reached a three-year high in the country. A number of state firms bought a combined 3.1 million metric tons of wheat from farmers since April 1. Eventually the figure may reach as high as 15 million tons, according to Food Corp. Chairman Alok Sinha.
Inflation for India has climbed to 7.14 percent over the same week a year ago.
Kazakhstan also announced today that they have instituted a four-month ban on wheat exports, also in an attempt to curb inflation and social unrest. While that would help Kazakhstan, it could hurt other nations in the region which have traditionally relied on Kazakh wheat.
India has bought 7 percent more wheat than usual from its domestic farmers, in an effort to combat inflation, which has reached a three-year high in the country. A number of state firms bought a combined 3.1 million metric tons of wheat from farmers since April 1. Eventually the figure may reach as high as 15 million tons, according to Food Corp. Chairman Alok Sinha.
Inflation for India has climbed to 7.14 percent over the same week a year ago.
Kazakhstan also announced today that they have instituted a four-month ban on wheat exports, also in an attempt to curb inflation and social unrest. While that would help Kazakhstan, it could hurt other nations in the region which have traditionally relied on Kazakh wheat.
Friday, April 11, 2008
Wheat News Weekend Roundup
=====
Spring wheat market shows some recovery
Despite a slightly bearish Prospective Plantings Report, the spring wheat market showed signs of recovery in the days following.
=====
World Wheat Production Boosted This Month, Consumption Trimmed, & Stocks Raised
World wheat production in 2007/08 is projected up 1.7 million tons this month to 606.7 million. The major increase is for Ethiopia, up 1.2 million tons as very good rains boosted yields.
=====
Adani sees wheat output at over 75mt
A bigger wheat crop is crucial to efforts by Prime Minister Manmohan Singh’s government to cool inflation that’s running at a three-year high before next year’s general elections.
=====
Scientists pit bacteria against fungi to protect wheat
Beneficial flower-dwelling bacteria could soon join the fight against Fusarium graminearum, the fungus that causes Fusarium head blight disease (scab) in wheat, barley and other cereal crops.
=====
Philippines Seeks Wheat Supplies After China Rebuff
The Philippines said China turned down a request to supply wheat, adding to concern that the world faces a worsening shortage of staple foods that has already driven grain prices to records.
=====
US Wheat Outlook: Seen Mixed On Overnight, CBOT Rebound
U.S. wheat futures are poised to start Friday's day session mixed, with Chicago Board of Trade contracts seen rising in a rebound from losses, traders said.
=====
Spring wheat market shows some recovery
Despite a slightly bearish Prospective Plantings Report, the spring wheat market showed signs of recovery in the days following.
=====
World Wheat Production Boosted This Month, Consumption Trimmed, & Stocks Raised
World wheat production in 2007/08 is projected up 1.7 million tons this month to 606.7 million. The major increase is for Ethiopia, up 1.2 million tons as very good rains boosted yields.
=====
Adani sees wheat output at over 75mt
A bigger wheat crop is crucial to efforts by Prime Minister Manmohan Singh’s government to cool inflation that’s running at a three-year high before next year’s general elections.
=====
Scientists pit bacteria against fungi to protect wheat
Beneficial flower-dwelling bacteria could soon join the fight against Fusarium graminearum, the fungus that causes Fusarium head blight disease (scab) in wheat, barley and other cereal crops.
=====
Philippines Seeks Wheat Supplies After China Rebuff
The Philippines said China turned down a request to supply wheat, adding to concern that the world faces a worsening shortage of staple foods that has already driven grain prices to records.
=====
US Wheat Outlook: Seen Mixed On Overnight, CBOT Rebound
U.S. wheat futures are poised to start Friday's day session mixed, with Chicago Board of Trade contracts seen rising in a rebound from losses, traders said.
=====
Wednesday, April 9, 2008
U.S. Wheat Closes Mixed - Weather, Nearby Markets Key Factors
U.S. wheat borrowed from its commodity neighbors corn and soybeans on the CBOT, helping it to gains, even though it was the "the weakest link in there, of all the grains," said Larry Glenn, owner of Glenn Commodities. "It's been following."
On the Chicago Board of Trade, May wheat remained at $9.34 a bushel. Minneapolis Grain Exchange May wheat ended at $13.20, a 5 cent increase, and May Wheat on the Kansas City Board of Trade settled 1 cent higher.
Continued forecasts of rain for the U.S. plains dampened expectations for a large, new crop, causing wheat to pull back from its borrowed surge earlier in the day.
According to the U.S. Department of Agriculture, expected supply and demand continues on course U.S wheat carryout, and remains at 242 million bushels; the same as in March.
Some analysts said the data from the USDA had no significant impact on the wheat markets, as weather, along with nearby markets are the what's affecting the wheat market more than anything else.
Another key factor is the expected huge global harvest this year, which could also hinder prices. Others think importers may keep old wheat inventory minimized, while waiting for the new crop to enter the market.
On the Chicago Board of Trade, May wheat remained at $9.34 a bushel. Minneapolis Grain Exchange May wheat ended at $13.20, a 5 cent increase, and May Wheat on the Kansas City Board of Trade settled 1 cent higher.
Continued forecasts of rain for the U.S. plains dampened expectations for a large, new crop, causing wheat to pull back from its borrowed surge earlier in the day.
According to the U.S. Department of Agriculture, expected supply and demand continues on course U.S wheat carryout, and remains at 242 million bushels; the same as in March.
Some analysts said the data from the USDA had no significant impact on the wheat markets, as weather, along with nearby markets are the what's affecting the wheat market more than anything else.
Another key factor is the expected huge global harvest this year, which could also hinder prices. Others think importers may keep old wheat inventory minimized, while waiting for the new crop to enter the market.
Thursday, April 3, 2008
Wheat Rises on Forecast for Dry Conditions in U.S. Great Plains
With dry weather expected to continue in the great plains, wheat rose for the second day in a row, as the winter crop is coming out of dormancy.
Both western Kansas and Texas, along with the Oklahoma Panhandle haven't received rain for two weeks, and there isn't any precipitation expected in the next five days either.
Meteorologists say the severe draught, which extends from Texas to the Canadian Prairies threatens the crop this year.
It is also expected that dry weather will expand to the central midwest from April through August, further disrupting wheat yields.
The U.S. Department of Agricultue said in a report on March 11 that global wheat inventories could fall to 110.4 million metric tons by May 31, with U.S. inventories possibly plunging by 6.6 million tons. That's a 47 percent drop from last year.
July delivery for wheat futures increased by 2 cents to reach $9.525 a bushel on the CBOT.
Both western Kansas and Texas, along with the Oklahoma Panhandle haven't received rain for two weeks, and there isn't any precipitation expected in the next five days either.
Meteorologists say the severe draught, which extends from Texas to the Canadian Prairies threatens the crop this year.
It is also expected that dry weather will expand to the central midwest from April through August, further disrupting wheat yields.
The U.S. Department of Agricultue said in a report on March 11 that global wheat inventories could fall to 110.4 million metric tons by May 31, with U.S. inventories possibly plunging by 6.6 million tons. That's a 47 percent drop from last year.
July delivery for wheat futures increased by 2 cents to reach $9.525 a bushel on the CBOT.
Wednesday, April 2, 2008
Wheat Futures Higher on Weather Concerns: both dry and wet
U.S. wheat futures finished higher at the exchanges, as they bounced back after the recent sell-offs, according to traders.
Contrary to the concerns over the wet acreage affecting planting of corn, wheat is having the opposite problem, as dry weather in key areas may end in the abandonment of wheat acreage in a number of places.
There were also concerns about some excess precipitation in soft winter wheat areas that could hinder planting.
For the Kansas City Board of Trade, May wheat increased by 36 cents to $9.86 a bushel, while the Minneapolis Grain Exchange May wheat increased by its allowable limit of 60 cents, to finish at $12.15. May wheat for the Chicago Board of Trade jumped by 41 1/2 cent to finish a $9.36 1/2.
Wheat inventory expectations and a possible large global planting had kept prices down for awhile.
Contrary to the concerns over the wet acreage affecting planting of corn, wheat is having the opposite problem, as dry weather in key areas may end in the abandonment of wheat acreage in a number of places.
There were also concerns about some excess precipitation in soft winter wheat areas that could hinder planting.
For the Kansas City Board of Trade, May wheat increased by 36 cents to $9.86 a bushel, while the Minneapolis Grain Exchange May wheat increased by its allowable limit of 60 cents, to finish at $12.15. May wheat for the Chicago Board of Trade jumped by 41 1/2 cent to finish a $9.36 1/2.
Wheat inventory expectations and a possible large global planting had kept prices down for awhile.
Subscribe to:
Posts (Atom)
