Global wheat market: global wheat prices are rising

 

On Friday, the Chicago Board of Trade (CBOT) December soft red winter wheat futures rose approximately 20.
25 cents or 2.
94% from a week ago to close at 708.
75 cents per cat
.
The December hard red winter wheat futures on the Kansas City Futures Exchange (KCBT) closed at approximately $713 per bus, up 30.
5 cents or 4.
47% from a week ago
.
The December hard red spring wheat futures on the Minneapolis Grain Exchange (MGEX) closed at approximately 900.
5 cents per bust, up 21.
75 cents or 2.
48% from a week ago
.
Euronext's December 2021 milling wheat period reported about 247.
75 euros/ton, an increase of 10 euros or 4.
21% from a week ago
.
The spot price of Argentine wheat was 293 US dollars/ton, up 5 US dollars or 1.
74% from a week ago, FOB price
.

 

　　On Tuesday, Statistics Canada lowered the forecast value of all wheat production in Canada to 21.
7 million tons, which was lower than the previous forecast of 22.
9 million tons and a decrease of 38.
3% from 2020, as the yield fell to 35.
2 bu/acre, a year-on-year decrease of 32.
6%; The area fell to 22.
7 million acres, a year-on-year decrease of 8.
5%
.
The main reason for the decline in wheat production is spring wheat.
In addition to the reduced planting area, the drought in Western Canada has also led to a reduction in spring wheat production
.
Statistics Canada lowered its forecast for spring wheat production from 16.
1 million tons to 15.
3 million tons, a 41% decrease from the previous year and the lowest output since 2007
.

 

　　Earlier this week, the European Union’s Food Traders Association (Coceral) released a monthly report showing that the production of soft wheat in the 27 EU countries and the United Kingdom in 2021 is expected to be 143.
4 million tons, lower than the 145.
8 million tons predicted in May
.
The adjustment is mainly due to lower-than-expected production in France, Germany and Scandinavia
.
However, the reduced production will still be much higher than the 128.
1 million tons produced in 2020
.
Coceral lowered the 2021 soft wheat production in the EU-27 to 128.
6 million tons, lower than the previous forecast of 130.
9 million tons, of which the French wheat production is expected to be 35.
1 million tons, which is lower than the 36 million tons forecast in May
.

 

　　In Russia, last week, Russian wheat export prices rose for the ninth consecutive week, because Russian wheat export tariffs continued to increase and domestic wheat production decreased
.
The consulting agency IAKR said that as of September 10, the FOB price of 12.
5% ​​of Russian protein wheat at the Black Sea port was US$300 per ton, and it was supplied at the beginning of October, an increase of US$0.
50 from a week ago
.
According to consulting agency SovEcon, the price of wheat in Russia has risen by US$2 from the previous week to US$303 per ton, while the price of barley has stabilized at US$260 per ton
.
SovEcon said that Russian wheat continues to lose competitiveness, but export tariffs are unpredictable, making it impossible for exporters to cut prices
.
Since June, the Russian government has adjusted export tariffs every week
.
From September 15 to 21, Russia’s wheat export tariffs were raised to US$52.
5 per ton, higher than the current US$46.
50
.
The benchmark price used to calculate the tariff is still lower than the actual FOB price
.
SovEcon said that tariffs are still a big uncertainty for wheat, and exporters face risks when they provide prices
.

 

　　However, this week Australia raised its wheat export forecast data, but pointed out that the rainy weather in spring threatened whether wheat can meet the top milling standards
.
The Australian Bureau of Agricultural Resources, Economics and Sciences (ABARES) raised its forecasts for Australian wheat exports from October to September of the year 2021/22 by 4.
39 million tons to 23 million tons, taking into account the latest output forecast data released last week
.
Although it is 665,000 tons lower than the export volume in 2020/21, it will still be the third highest point in history
.
Last week, ABARES raised its output of Australian wheat for the year of 2021/22 by 4.
8 million tons to 32.
63 million tons, which was only 704,000 tons less than the previous year's record output of 33.
337 million tons
.
ABARES said that the output value of Australian wheat exports in 2021/22 is expected to reach a record US$8.
5 billion, reflecting the high export volume and high prices of wheat
.

 

　　Canadian and American spring wheat crops are affected by drought, which is conducive to the growth of Australian wheat exports
.
The two countries compete fiercely with Australia in the export market for high-protein wheat
.
Due to the declining supply of high-protein wheat in the two countries, the prices of high-protein wheat in Canada and the United States have soared
.
The quality of wheat in the EU has also been reduced due to rain during harvest, especially in France, the number one wheat exporter in Europe
.
France AgriMer, the crop office under the French Ministry of Agriculture, said on Friday that only 39% of soft wheat in France has a bulk density higher than the flour processing standard of 76 kg/100 liters
.

 

　　In contrast, Australian wheat production is expected to hit a record second-highest in history, and export quotations may be competitive, which will help Australian wheat fill the supply gap in the United States and Canada
.
However, ABARES cautioned that excessive rainfall in spring may delay harvest, leading to an increase in the proportion of low-protein wheat and increasing the chance of wheat damage or degradation
.
Most of the main wheat producing areas in Australia have a chance of exceeding the average rainfall in more than 70%
.
The impaired quality of Australian wheat may weaken Australia’s opportunity to take advantage of the low global supply of high-quality wheat to expand exports
.