For the years 2017 and 2018, production across the globe has increased to record breaking levels thanks to larger crops in Argentina, Ukraine and Moldova. The International trade forecast is up from the previous month.
In Indonesia, import forecasts are also higher, however, it’s lower in India and in the European Union. The Argentina, Pakistan, Russia and Canada forecasts were offset more than the forecasts for the U.S. and the European Union. The United States season benchmark farm price remained the same at $4.60 per bushel.
Wheat Price in the U.S.
The overall wheat prices in the United States edged higher in January on lingering concerns of over drought conditions in HRW or Hard Red Winter wheat sectors. These rising wheat prices caused the United States to be less competitive in the global wheat market amid the appearance of abundant competitor supplies.
Hard Red Winter rose $16 /ton to hit $240, the Soft Red Winter (SRW) climbed $11/ton reaching $183 while Soft Red Winter (SRW) edged up $11/ton to reach $183. But the Soft White Winter (SWW) barely moved, gaining just $3/ton to reach $203 and Hard Red Spring (HRS) moving up with only $1/ton to hit $278.
Indonesia snags the title as the the biggest importer for the year 2017/18 at 12.5 million metric tons, surpassing Egypt as the top importer of wheat. Wheat imports from Indonesia have been steadily growing due to food and feed demand.
The rise of population and incomes came along with diet trends moving towards western pastries, poultry and instant noodles. According to the October 2017 World Grain Market and Trade report, low priced wheat milling remains in the affordable price range which is considered to be an affordable process to make feed rations even though restrictions are sanctioned upon the wheat import.
Indonesia’s top four main wheat suppliers have been Australia, Canada, Ukraine and the United States but competitive prices of Black Sea wheat continues to weigh on the high quality suppliers by providing wheat at a lower price.
Pace Analysis of U.S. exports
On February, the U.S. June-May marketing year export estimate was dropped by 25 million bushels to 950 million bushels. The total commitments fell 11 percent which consists of collected exports, which are a smidge lower than the previous year, and outstanding sales, which have plunged 25 percent. The U.S. trade year of July – June seen lowered imports by 1.0 million tons to 25.0 million.
Last year, the competitive attitude of the U.S. has changed resulting into both area and yield dropping from the year before, 2017/18 U.S. crop was recorded to be the smallest in 15 years.
Massive crops harvested in Argentina are being shipped to Brazil. U.S. shipments to that market have faltered after the unusually hefty exports from last year. The low costs of Argentine supplies are also weighing on U.S exports, challenging the country to other venues across the globe, specifically in the Sub-Saharan Africa and Southeast Asia.