The wheat ending stocks are projected to be at 991 million bushels, according to the latest USDA figures, down a little from May, but irrelevant because of the enormous supply.
Even with the news out of Canada that wheat production is lower because of less acreage planted than originally thought, it's not going to do much to move prices at all.
And there is so much wheat the wet weather keeping farmers from planting their fields won't do anything either.
I talked about this last year, and it continues to puzzle me why farmers don't move out of their wheat planting and into a more profitable crop.
Add to this the increasing number of wheat farmers and production around the world and there is little reason to pursue wheat at this time.
Showing posts with label Wheat Production. Show all posts
Showing posts with label Wheat Production. Show all posts
Friday, June 11, 2010
Tuesday, June 8, 2010
Wheat Woes Continue, Plunge to Three-Year Low
Good weather has resulted in a strong wheat crop, and consequently wheat futures plunged to a 3-year low as harvest in the southern U.S. Great Plains States begins.
Precipitation was the major factor in the bumper yields, as there was four times as much rain in the last month than normal, according to National Weather Service data.
Wheat futures for July delivery fell 3.5 cents, 0.8 percent, to $4.3225 a bushel on the Chicago Board of Trade, after reaching $4.31 a bushel, the lowest price for a most-active contract since April 3, 2007.
With the growing number of wheat farmers around the world and bumper wheat crops, there continues to be little reason prices will increase going forward, and makes you wander why farmers continue to plant the grain, other than government subsidies.
Precipitation was the major factor in the bumper yields, as there was four times as much rain in the last month than normal, according to National Weather Service data.
Wheat futures for July delivery fell 3.5 cents, 0.8 percent, to $4.3225 a bushel on the Chicago Board of Trade, after reaching $4.31 a bushel, the lowest price for a most-active contract since April 3, 2007.
With the growing number of wheat farmers around the world and bumper wheat crops, there continues to be little reason prices will increase going forward, and makes you wander why farmers continue to plant the grain, other than government subsidies.
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, 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.
Tuesday, December 9, 2008
Wheat Rises as Australian Harvest Delayed by Drought
Wheat rose today on news in a statement from the Australian Bureau of Agriculture and Resource Economics which said drought conditions could significantly delay the Australian wheat harvest, and also could have a detrimental effect on the quality of the grain produced.
This seems like it's only a upward blip in the road, as there's so much wheat available for export this year, any news will cause a slight upward movement for wheat.
The December crop report from the Australian Bureau of Agriculture and Resource Economics shows wheat exports for the country are expected to reach 12.3 million tons, a significant increase from the 7.5 million tons exported last year.
With Australia attempting to compete in the premium wheat market of Taiwan, this probably couldn't have come at a worse time.
At 10:30 a.m. today on the Chicago Board of Trade, wheat futures for March delivery rose 2.5 pecent to $4.93 a bushel.
This seems like it's only a upward blip in the road, as there's so much wheat available for export this year, any news will cause a slight upward movement for wheat.
The December crop report from the Australian Bureau of Agriculture and Resource Economics shows wheat exports for the country are expected to reach 12.3 million tons, a significant increase from the 7.5 million tons exported last year.
With Australia attempting to compete in the premium wheat market of Taiwan, this probably couldn't have come at a worse time.
At 10:30 a.m. today on the Chicago Board of Trade, wheat futures for March delivery rose 2.5 pecent to $4.93 a bushel.
Saturday, December 6, 2008
Australia Aiming to Compete in the Lucrative Taiwanese Premium Wheat Category
With record-setting wheat production this year, prices have been plummeting, putting pressure on the U.S., the world's largest exporter.
If that's not enough, the high-end wheat market is now receiving potentially more competition, as Taiwanese wheat importers are visiting Australia to get a first-hand look at how they produce, handle and transport their wheat.
AgFarm, an Australian grain trading specialist, is hosting the event, where seven flour millers from Taiwan observe the practices.
In a trial run last year, the Taiwanese flour mills imported 8,000 metric tons of high protein wheat.
Taiwan is known for its fickleness concerning quality standards of wheat, and the exercise is for the purpose of learning how Australian wheat producers can meet those rigid standards.
The reward is a premium price paid for meeting their specifications.
Historically, the U.S. has been the dominating force in this premium market, and it could signal a significant new competition if Taiwan is convinced Australia can consistently deliver the high quality, high protein wheats.
At this time there is no commitment from the Taiwanese, but after the tour AgFarm is hoping to secure orders for the wheat.
If that's not enough, the high-end wheat market is now receiving potentially more competition, as Taiwanese wheat importers are visiting Australia to get a first-hand look at how they produce, handle and transport their wheat.
AgFarm, an Australian grain trading specialist, is hosting the event, where seven flour millers from Taiwan observe the practices.
In a trial run last year, the Taiwanese flour mills imported 8,000 metric tons of high protein wheat.
Taiwan is known for its fickleness concerning quality standards of wheat, and the exercise is for the purpose of learning how Australian wheat producers can meet those rigid standards.
The reward is a premium price paid for meeting their specifications.
Historically, the U.S. has been the dominating force in this premium market, and it could signal a significant new competition if Taiwan is convinced Australia can consistently deliver the high quality, high protein wheats.
At this time there is no commitment from the Taiwanese, but after the tour AgFarm is hoping to secure orders for the wheat.
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.
Friday, November 21, 2008
U.S. Could Land Some Wheat Export Business from Brazil
There are some things that would have to be overcome in order for Brazil to import some U.S. wheat this year; something that has become rare since the agreement between several South American countries to sell grain between countries with no duty attached to the deals.
While Argentina usually supplies the bulk of wheat to Brazil, this year their production has fallen drastically from last year's 16 million tons to only 10.1 million this year. Of that, last year 10.5 million tons were exported to Brazil, and this year projections are for only 5.8 million tons to be available.
The major disruptions causing the lackluster production for Argentina has been dry weather and less acreage planted in wheat.
A key factor the attractiveness of exporting to Brazil for the U.S. is if Brazil drops its import tax. The U.S. is able to send a high quality wheat with low freight charges, giving them an advantage over its competitors.
If that doesn't happen, U.S. wheat exports don't look too good.
With India making over 2 million extra tons of wheat available for export in their region, and Russia winning North Africa and Middle East contracts, it makes it harder for the U.S. to compete, as there's an abundance of wheat available because of the record crop this year.
The USDA is once again expected to drop its wheat export estimates over the next several months.
While Argentina usually supplies the bulk of wheat to Brazil, this year their production has fallen drastically from last year's 16 million tons to only 10.1 million this year. Of that, last year 10.5 million tons were exported to Brazil, and this year projections are for only 5.8 million tons to be available.
The major disruptions causing the lackluster production for Argentina has been dry weather and less acreage planted in wheat.
A key factor the attractiveness of exporting to Brazil for the U.S. is if Brazil drops its import tax. The U.S. is able to send a high quality wheat with low freight charges, giving them an advantage over its competitors.
If that doesn't happen, U.S. wheat exports don't look too good.
With India making over 2 million extra tons of wheat available for export in their region, and Russia winning North Africa and Middle East contracts, it makes it harder for the U.S. to compete, as there's an abundance of wheat available because of the record crop this year.
The USDA is once again expected to drop its wheat export estimates over the next several months.
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.
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