The wheat market was hit with two sets of bearish data this week. Firstly, the USDA increased global wheat production by a substantial 5.0mmt, with ending stocks at 257mmt. The increases, were well above the trades most optimistic estimates, including 54.7mmt in the US (up 3.6mmt) and an additional 1mmt in Canada to 35mmt.
Secondly, last night the IGC confirmed these figures by increasing global production and carryout using their own metrics. World wheat production in 2024/25 is set to edge higher year on year, to the second highest level on record. The annual rise is partly linked to a larger US crop, plus improved conditions in Canada, Pakistan and Kazakhstan. Global wheat production was lifted 8mmt from 793mmt to 801mmt with carryover increased by the same amount to 269mmt.
The wheat market, which had seen some positives out of recent tender activity, lost steam and closed lower in the over night trade.
The USDA report did highlight the shift of global wheat stocks away from the Black Sea. Russian ending stocks were lowered to 6.7mmt, the lowest in 10 years. Ukraine’s stocks were also lowered to a meagre 0.9mmt, the lowest level in 24 years. The shift of global stocks from the Black Sea is expected to partially weaken the influence of events in Russia and Ukraine on global markets. (D Voznesenski)
Geopolitics roared back into life over the weekend with the attempted assassination of Donald Trump. After the iconic images immediately post shooting emerged, the bookies effectively shut their books and paid out early on a Republican victory. The market is now digesting what a second term under Trump would look like. It is thought that part of the weakness in the markets we are seeing is attributed to concerns of a new trade war with China and how that would impact US ag exports.
Tender activity has increased with the recent weakness in wheat prices. This week we saw GASC (Egypt) buy 770kmt, out of 2.2mmt offered. Jordan surfaced for 120kmt and South Korea bought a boat of US wheat. The Egyptian tender was nearly all Black Sea origins at a very cheap US$221/t FOB. Dirt cheap. Seems that old habits are hard to break.
Next week
Russian pricing continues to set the tone for global wheat prices. US weather looks largely favourable in the short term creating headwinds for feed prices.
Another interesting week in global markets and politics. After making oddly specific threats of tariffs against China, Canada and Mexico in Trump’s first few hours
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Wheat stuck between a rock and a hard place
Secondly, last night the IGC confirmed these figures by increasing global production and carryout using their own metrics. World wheat production in 2024/25 is set to edge higher year on year, to the second highest level on record. The annual rise is partly linked to a larger US crop, plus improved conditions in Canada, Pakistan and Kazakhstan. Global wheat production was lifted 8mmt from 793mmt to 801mmt with carryover increased by the same amount to 269mmt.
The wheat market, which had seen some positives out of recent tender activity, lost steam and closed lower in the over night trade.
The USDA report did highlight the shift of global wheat stocks away from the Black Sea. Russian ending stocks were lowered to 6.7mmt, the lowest in 10 years. Ukraine’s stocks were also lowered to a meagre 0.9mmt, the lowest level in 24 years. The shift of global stocks from the Black Sea is expected to partially weaken the influence of events in Russia and Ukraine on global markets. (D Voznesenski)
Geopolitics roared back into life over the weekend with the attempted assassination of Donald Trump. After the iconic images immediately post shooting emerged, the bookies effectively shut their books and paid out early on a Republican victory. The market is now digesting what a second term under Trump would look like. It is thought that part of the weakness in the markets we are seeing is attributed to concerns of a new trade war with China and how that would impact US ag exports.
Tender activity has increased with the recent weakness in wheat prices. This week we saw GASC (Egypt) buy 770kmt, out of 2.2mmt offered. Jordan surfaced for 120kmt and South Korea bought a boat of US wheat. The Egyptian tender was nearly all Black Sea origins at a very cheap US$221/t FOB. Dirt cheap. Seems that old habits are hard to break.
Next week
Russian pricing continues to set the tone for global wheat prices. US weather looks largely favourable in the short term creating headwinds for feed prices.
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Click on graph to expand
Data sources: IGC, USDA, Reuters, CommBank, Mecardo
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Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
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Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
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We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.