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Global wheat market: wheat prices fell due to increased global supply

 Last Update: 2022-11-25
 Source: Internet
 Author: User

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Foreign media news on November 13: In the week ending November 11, 2022, global wheat prices mostly fell as the US Department of Agriculture raised global wheat supply data in its November supply and demand report, and US wheat export sales were sluggish
.
However, the worsening production outlook due to prolonged drought in the United States and Argentina has limited the downside
in wheat prices.
Until the Black Sea agreement expires on November 19, markets will also continue to focus on Black Sea export negotiations
.

The Chicago Board of Trade (CBOT) December soft red winter wheat futures closed at about $8.
1375 a bushel on Friday, down 4 percent
from a week ago.
December hard red winter wheat futures on the Kansas City Futures Exchange (KCBT) closed at about $9.
435 a bushel, down 1 percent
from a week ago.
The Minneapolis Grain Exchange (MGEX) hard red spring wheat for December settled at about $9.
4575/bu, down 0.
9 percent
from a week ago.
Euronext's December 2022 futures closed at about 327.
25 euros/mt, down 3.
5% from a week ago; Argentine wheat spot quotations were $411/mt, down 0.
5%
from a week ago.
ICE's dollar index closed at 106.
164 on Friday, down 4.
2 percent
from a week ago.

The U.
S.
Department of Agriculture unexpectedly raised wheat production in Australia and Kazakhstan

The USDA's November supply and demand report kept U.
S.
wheat production and export expectations unchanged for 2022/23, but revised up food demand, lowering U.
S.
wheat ending stocks to 571 million bushels, down 14.
6%
year-on-year from last month's estimate of 576 million bushels.

In terms of global wheat supply and demand, the 2022/23 global wheat production forecast was raised by 1 million mt this month to 782.
7 million mt, up 0.
4%
year-on-year, as wheat production in Australia and Kazakhstan outpaced cuts to Argentina and the European Union.

While flooding caused by heavy rains in parts of Australia has raised concerns about the quality of Australian wheat, the US Department of Agriculture raised wheat production to 34.
5 million mt this month, 1.
5 million mt higher than last month's forecast and only 5.
1%
lower than the previous year's all-time high of 36.
35 million mt.
The USDA justifies that root zone soil moisture in the main planting areas is at or above average, supporting yield potential
.

Kazakhstan's wheat production this month rose by 1 million tonnes to 14 million tonnes, up 18.
5%
year-on-year.

This month, the U.
S.
Department of Agriculture cut Argentina's wheat production by 2 million mt to 15.
5 million mt, down 30 percent
from a year earlier.
In contrast, Argentina's local exchange forecasts production of only 11.
8 million tons to 12.
4 million tons, a year-on-year decrease of about
50%.

EU wheat production is expected to be 134.
3 million mt, down 2.
9%
from a year of 134.
8 million mt forecast last month.

Global wheat supply estimates were revised upward by 1.
3 million tonnes to 1,059 million tonnes
due to higher opening stocks and production.
Global wheat ending stocks for 2022/23 were raised by 300,000 tonnes to 267.
8 million tonnes, down 3.
1%
year-on-year.

Notably, the USDA left its Russian wheat production forecast unchanged this month at 91 million mt, despite the recent sharp increase in Russian wheat production forecasts by local agencies, with SovEcon expecting a record 100.
6 million mt of wheat production in 2022/23 and IKAR 101 million mt
.

Rainfall in the U.
S.
plains helped improve wheat ratings, but remained at the bottom of the same period in history

The USDA's weekly Crop Progress report showed that rain in much of eastern and central Kansas helped improve U.
S.
winter wheat yields in
the week ended Nov.
8.
As of Nov.
6, the U.
S
.
winter wheat yield improved to 30 percent from 28 percent a week earlier, but remained the lowest since the 1980s.
U.
S.
winter wheat sowing progress is 92 percent, with a five-year average of 90 percent
.
The emergence rate was 73%, with a five-year average of 74%.

The U.
S.
Drought Monitor report showed several inches of rain in much of eastern and central Kansas, downgrading
the state's drought rating.
But drought ratings have improved
in areas that missed rainfall.
Among them, the drought rating in northeast and western Nebraska was raised to extremely arid and super arid; Arid areas in western Kansas, eastern Colorado and eastern Wyoming also expanded
.

On Friday, the U.
S
.
weather agency predicted cooling weather in the northern plains of the United States, with temperatures likely below freezing.
Cold rain is likely to occur in the southern plains early next week
.

It should be noted that spring rains have a much greater impact on winter wheat yield potential than autumn and winter weather
.
As La Niña weakens next spring, drought levels in the Great Plains could wane, helping to improve winter wheat conditions
.
The Japan Meteorological Agency estimates an 80% chance that La Niña will continue into mid-winter in the Northern Hemisphere and a 70%
chance of continuing into spring.

U.
S.
wheat exports continue to lag

US net wheat sales for 2022/23 were 322,500 mt in the week ended Nov.
3, down slightly from 348,100 mt a week earlier and at the low end of
the market's expected range, according to the USDA's weekly export sales report.
U.
S.
wheat export sales totaled 12.
49 million mt year-to-date, down 5.
9%
year-on-year.

Argentina's wheat production continued to decline sharply

Argentina's two grain exchanges again significantly lowered their wheat production forecasts
this week.
On Wednesday, the Rosario Exchange lowered Argentina's wheat production for 2022/23 to 11.
8 million mt, down from 13.
7 million mt forecast last week and the lowest since 2015/16 (10.
9 million mt) and 48.
7%
lower than the previous year's record output of 23 million mt.
The Rosario Grain Exchange said there was still the possibility of further downward revisions to wheat production as the drought
persisted.
The Buenos Aires Grain Exchange cut its wheat production forecast to 12.
4 million mt the next day, down from 14 million mt
cut just last week.
In contrast, the U.
S.
Department of Agriculture on Wednesday lowered Argentina's wheat production by 2 million mt to 15.
5 million mt
.

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