The big story in world wheat trade the last few months is that of a record amount of available wheat.
That scenario didn’t change after the USDA released its monthly World Agricultural Supply and Demand Estimates (WASDE) report on Sept. 12.
While the report had little apparent impact on world wheat markets, USDA now expects record-breaking world wheat production this year, and that presents an excellent opportunity for buyers.
The 2013/14 U.S. supply and demand estimates remained virtually unchanged from August, but USDA did increase world wheat production by 3.5 million metric tons (MMT) to 709 MMT.
As the Northern Hemisphere wheat harvest advances into its final stages, USDA believes there is more wheat than it expected a few months ago.
Strong harvest reports led USDA to increase projected Canadian production by 2.0 MMT to 31.5 MMT. If realized, it would be a 16 percent increase from 2012/13 and Canada’s largest crop since 1991/92. USDA also bumped up production forecasts for major wheat exporters Ukraine and the European Union.
Wheat prices are also trending in favor of buyers. U.S. wheat futures are currently at their lowest level since June 2012, following a traditional pattern of lower prices at the end of Northern Hemisphere harvests when supplies are greatest.
Yet as wheat supplies ship from all origins and global stocks dwindle late in the marketing year, prices will inevitably rise. USDA expects global wheat consumption to reach a record 707 MMT in 2013/14 and world wheat trade to be greater than average in order to meet the increased demand.
The United States is on track to produce another large, high quality crop. Thanks to an efficient and effective marketing system, supplies are available year round. Buyers would be wise to consider making purchases now while prices are low and selection is high. For more information, contact your local USW representative.