Global Wheat Market, Price, Demand and Supply

The prices for wheat futures edged lower because of unfavourable weather in many top countries like France, the UK, US and Argentina. On the other hand, a few other others recorded decent levels of harvest. Here’s the global wheat report of this season.

Europe Harvest Presents a Mixed Outcome

Wheat harvests in Europe witnessed a mixed outcome. On the one hand, there was a decent harvest in countries like Germany and Poland. While on the other France and the UK did not yield a good harvest. The rains in autumn and the dry spring climate negatively impacted the crop of soft wheat in France. Accordingly, it led to a 25% fall in year on year estimates and is now projected to be at 29.5 million tonnes. A French Consultancy company Agritel predicts a 40% fall in the export of small soft wheat because of the lousy harvest this season.

Likewise, traders also estimated the yield in the UK to fall to 10.5 million tonnes which are a 35% decrease from last year. The reason for this is the rains that disrupted sowing and ultimately resulted in low production. Also might lead to the UK importing the deficit that might arise.

Germany also saw a fall of 5% in wheat production. But traders say that the decrease is not as large as France or the UK. Therefore, traders expect Germany to receive more export orders from France’s primary customer Algeria. Along with that, they also hope to increase sales in Britain. On the other hand, Wojtek Sabaranski of Sparks Polska estimated the Polish harvest to increase by 4-5%.

China is Not Importing Wheat From Russia

Russia is one of the major exporters of wheat in the world and exports to almost 100 countries. But, a few markets like China and Algeria have remained elusive because Russian wheat does not meet their standards. Further, due to the fear of the dwarf bunt fungus, China has restricted the imports from the other areas in Russia.

China has nearly doubled its imports in the last few years. Further, Chinese imports are at a seven-year high as they look to ensure food security amidst the pandemic. This poses to be good news for countries like France and Australia. Unfortunately, Russia can only export small amounts of wheat to China, predominantly from its Eastern production regions.

Currently, Russia’s efforts to increase wheat exports to China have been hampered by the coronavirus pandemic. According to Yulia Melano, representative of the government’s agricultural agency Rosselkhoznadzor, China only authorizes a region after inspection, and that has not been possible to implement due to the pandemic.

Bumper Wheat Crop in Canada

The all-wheat production in Canada is estimated to increase by 11%. As a result, the total wheat production will go up to 35.74 million tonnes from 32.35 million tonnes in the previous year. Statistics Canada also noted that the increase was due to the durum and remaining winter wheat area after winterkill that helped offset the fall in the spring wheat area. Further, they mentioned that increase in yields for all types of wheat nationally would also contribute to the production increase.

Brian Voth, president of IntelliFARM, was apprehensive of the high wheat estimates portrayed on a call to discuss the results by MGEX. Further, he mentions the durum variety being tight in supply. Traders also feel that the Canadian government agency’s modelling that uses satellite technology ended too early. Therefore, it did not capture the heatwave that negatively impacted the yields in many places.

Australia Targets UK, France and the US for Wheat Exports

The demand for high-value and high-quality wheat from Australia will increase on the back of product shortages in the US and many other European countries. However, the prices of wheat futures are still low because of the massive amounts of low-quality wheat produced in Russia, India and China.

Even though the prices are low, Australian farmers are hoping to get a good deal in the market because of high-quality wheat shortage globally. Adding to that, Australia had the highest production levels in 3 years and was quite contrary to its competitors. Therefore, they are in good stead to expand their market in the UK, US and France. These countries will look to fill their consumption needs in the absence of quality domestic produce.

Wheat Exports from Paraguay Drop by Over 40%

Brazil imports almost 99% of the wheat exports from Paraguay. Bolivia and Vietnam import the remaining 1% of the produce. The Paraguayan Chamber of Cereals and Oilseed exporters and traders, Capeco said that the country’s exports decreased by 42.2% in July to around 267,949 tons. It is about 196,056 tons fall from the previous month.

Some countries had a bumper harvest while others had record low levels of production. In all, the prices of wheat futures are down because of the cheaply available wheat from countries like Russia, China and India.

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