Global wheat market: severe cold weather is worrying, boosting wheat prices

 

On Friday, the Chicago Board of Trade (CBOT) May soft red winter wheat futures rose approximately 14.
25 cents from a week ago, to close at 655.
50 cents per cat.
The Kansas City Futures Exchange (KCBT) May hard red winter wheat futures closed at about 638.
25 cents per bus, up 15.
75 cents from a week ago.
The May hard red spring wheat futures on the Minneapolis Grain Exchange (MGEX) closed at approximately 640 cents/bus, up 14 cents from a week ago.
Euronext's May 2021 milling wheat period reported about 227.
25 euros/ton, an increase of 9 euros from a week ago.
The spot price of Argentine wheat was US$272/ton, down US$1 from a week ago, FOB prices.
The Zhengzhou Commodity Exchange's wheat futures for delivery in May 2021 closed at 2,734 yuan/ton, an increase of 9 yuan from before the holiday.

 

　　U.
S.
severe cold weather threatens winter wheat crop growth

 

　　Recently, the coldest weather in 126 years in the Midwest and Great Plains of the United States has threatened the lack of snow-covered winter wheat and caused the eastern wheat crop to freeze to death.
However, the specific disaster situation will not be clear until spring.
Weather forecasts indicate that the temperature in the Great Plains will rise in the next two weeks.
According to the State Crop Status Report released by the US Department of Agriculture last month, as of January 23, the quality rate of winter wheat in Kansas, the number one producing region, was 43%, which was lower than 46% at the beginning of the month but higher than 34% in the same period last year.
The excellent and good rate of winter wheat in Colorado was 17%, lower than the 19% at the beginning of the month.
The condition of Oklahoma's winter wheat crop has improved, with an excellent and good rate of 61%, up from 51% in early January.

 

　　Cold weather also appeared in Europe and the Black Sea region in the past week.
Although the impact of cold weather cannot be determined until the wheat turns green, EU wheat production is not expected to suffer major losses.
With temperatures rising this week, the immediate threat of severe cold in most of Europe has been eliminated.

 

　　Russia imposes export tariffs and lowers wheat production

 

　　Russia will begin to impose a wheat export tax of 25 euros/ton from this Monday (February 15), and the tariff will be raised to 50 euros/ton from March 1st.
Starting from June 2nd, Russia will implement floating export tariffs.
The calculation formula is to subtract 200 euros from the benchmark price of wheat exports, and then multiply by 70%.
Exporters rushed to export wheat before February 15, driving a surge in wheat exports.
According to Russian government data, as of the week of February 11, Russia exported 1.
6 million tons of wheat, bringing the export volume so far in 2020/21 to 32.
1 million tons, an increase of approximately 31% year-on-year.

 

　　On Thursday, SovEcon, a Russian agricultural consulting agency, lowered the forecast of Russian wheat production in 2021 to 76.
2 million tons, lower than the previous forecast of 77.
7 million tons, due to unfavorable weather conditions and the government's imposing wheat export taxes.

 

　　Australian wheat production raised to record levels

 

　　The Australian Bureau of Agricultural Resources, Economics and Sciences (ABARES) predicted this week that Australian wheat production in 2020/21 will reach a record 33.
33 million tons, a surge of 119.
8% year-on-year, and also surpassed the previous record of 31.
8 million tons set in 2016/17.
In December of last year, ABARES predicted that this year's wheat production was 31.
17 million tons.
ABARES has also raised its 2020/21 Australian barley production forecast, which is expected to reach 13.
093 million tons, an increase of 45.
5% from the previous year's 9.
01 million tons and slightly lower than the 2016/17 record of 13.
4 million tons.

 

　　U.
S.
wheat sown area is expected to increase, but stocks will hit an 8-year low

 

　　At the annual Agricultural Outlook Forum held on Thursday, the U.
S.
Department of Agriculture estimated that 45 million acres of wheat will be planted in the United States in 2021/22, up from 44.
3 million acres in the previous year.
The US wheat production in 2021/22 is estimated to be 1.
827 billion cats, slightly higher than the 1.
826 billion cats of the previous year.
The total supply is expected to be 2.
793 billion cats, lower than the 2.
974 billion cats of the previous year; the total wheat consumption is estimated to be 2.
095 billion cats.
Last year 2.
138 billion cats; exports are expected to be 925 million cats, compared with 938 million cats last year.
The ending stocks of US wheat in 2021/22 are estimated to be 698 million cats, lower than the 836 million cats of the previous year and the lowest level in eight years.
The U.
S.
Department of Agriculture estimates that the average wheat farm price in 2021/22 will be US$5.
50 per cat, higher than the US$5 per cat in the previous year.

 

　　The U.
S.
Department of Agriculture predicts that the sown area of ​​winter wheat in the United States will reach 32 million acres in 2021, an increase of 5% year-on-year.
This is the first increase in wheat acreage since 2013.
Since the fall, crop prices have risen sharply, as global supply is tight and international demand is strong, which will encourage American farmers to expand planting acreage.

 

　　Canadian wheat sown area is expected to hit a four-year low

 

　　The Canadian Department of Agriculture (AAFC) released the February supply and demand report, reducing the 2020/21 season's Canadian wheat ending stocks to 5.
85 million tons, lower than the 6.
25 million tons forecast in January.

 

　　The AAFC lowered the sown area of ​​wheat in Canada in 2021/22 by more than 400,000 hectares to 9.
93 million hectares, which is also the lowest point in four years because of fierce competition from other crops.
The AAFC forecasts that all wheat production in the 2021/22 season is 32.
75 million tons, which is 900,000 tons lower than the initial forecast and 2.
44 million tons lower than the 2020/21 production.

 

　　In 2021/22, Canada's export forecast for all wheat (including durum wheat) has also been lowered to 24 million tons, a decrease of 2.
45 million tons from the previous year, because there is still uncertainty about whether China can maintain the strong import trend this year.