Foreign media news on March 7:In the week ending March 5, 2021, most of the global wheat prices fell due to the strong US dollar exchange rate, weak US wheat export sales, overall good condition of winter crops in the Black Sea region, and clear wheat exports from Australia. . However, the situation of winter wheat crops in the United States is declining, and the output of next season wheat in Australia may be reduced, providing potential support for wheat prices.
On Friday, the Chicago Board of Trade (CBOT) May soft red winter wheat futures fell by about 7.25 cents from a week ago, to close at 653 cents per bushel. The Kansas City Futures Exchange (KCBT) May hard red winter wheat futures closed at about 626.25 cents per bushel, down 7.5 cents from a week ago. The May hard red spring wheat futures on the Minneapolis Grain Exchange (MGEX) closed at approximately 645.25 cents per bushel, up 6.5 cents from a week ago. Euronext’s May 2021 milling wheat period reported about 228.25 euros/ton, down 1.25 euros from a week ago. The spot price of Argentine wheat was US$267/ton, down US$1 from a week ago, FOB price. The Zhengzhou Commodity Exchange’s wheat futures for delivery in May 2021 closed at about 2,781 yuan/ton, an increase of 43 yuan from a week ago.
On Friday, the US dollar index closed at 91.99 points, up 1.2%from a week ago.
The rating of U.S. winter wheat declines
The weekly crop report issued by the National Bureau of Agricultural Statistics of the United States Department of Agriculture showed that as of February 28, the excellent and good rate of winter wheat in Kansas was 37%, lower than the 40%one week ago. Texas, the second largest winter wheat producing region, has an excellent and good wheat yield rate of 28%, down from 30%a week ago. The excellent and good rate of winter wheat in Oklahoma was 46%, down from 48%a week ago. The U.S. Department of Agriculture estimates that the sown area of winter wheat in 2020/21 will be 31.99 million acres, an increase of 5%year-on-year.
U.S. wheat lacks competitiveness in the world export market
US wheat is uncompetitive for most global buyers. The US Department of Agriculture’s weekly export sales report shows that for the week ending February 25, the US’s 2020/21 net wheat sales were 220,000 tons, 51%lower than the four-week average, and 66,000 tons of US wheat were sold to China that week. . The total US wheat export sales so far this year are 23.79 million tons, an increase of 2.6%over the same period last year.
The wheat in the Black Sea region is in good condition and has not been damaged by severe cold weather
Although the market has worried that the severe weather in the Black Sea region may affect the growth of winter crops, this week the Russian Hydrometeorological and Environmental Monitoring Center (Roshydromet) stated that the overall condition of winter crops in southern Russia in February 2021 was good. The agrometeorological conditions in other regions of Russia are basically satisfactory. In most areas, there is no cold weather that threatens winter crops.
Australia’s wheat production and exports will decline next year
This week, the Australian Bureau of Agricultural Resources, Economics and Sciences (ABARES) said that due to the bumper harvest of Australian wheat, the forecast for Australian wheat exports for 2020/21 (October to September of the following year) has been revised up by 862,000 tons to 21.36 million tons. This will be the highest level in four years and the third export high point on record. However, as the yield will return to a more normal level, ABARES predicts that Australia’s wheat production in 2021/22 will be reduced to 25 million tons, so the next season’s exports will fall back to 16.45 million tons.
FAO expects EU wheat production to increase by 9%next year
The Food and Agriculture Organization of the United Nations (FAO) stated that despite the adverse effects on wheat crops in Russia and the United States, the European Union will lead the next year’s global wheat production to a new high. For the first time, FAO predicts that global wheat production in 2021/22 will reach 780 million tons, an increase of 6 million tons from this year’s record output of 774 million tons. Most of the increase in output will come from the European Union, because the EU’s wheat planting area will recover from the low point of the previous year. The EU wheat production in 2021/22 will reach 137 million tons, an increase of nearly 9%from the 125.2 million tons in 2020.
The wheat production in Argentina to be harvested by the end of 2021 is expected to reach 19 million tons, an increase of 1.4 million tons year-on-year. Ukrainian wheat production is expected to increase by 900,000 tons year-on-year to 26 million tons. However, wheat production in countries such as Canada and Russia will decline because the planting area is reduced and the prospects for wheat planting income are lower than alternative crops. Russia’s wheat production in 2021 is expected to be 79 million tons, a year-on-year decrease of 6.9 million tons.
Next week, the USDA may slightly increase global wheat ending stocks
On Tuesday, the US Department of Agriculture will release its monthly supply and demand report. It is estimated that it will not adjust the wheat supply and demand data in the United States and the world. Analysts predict that global wheat ending stocks in 2020/21 may be slightly increased to 11.184 billion bushels, slightly higher than last month’s forecast.