Global wheat market:weather worries, wheat prices continue to rise
By: Date: 2021-04-20 Categories: Internationalfood Tags: ,
   News of April 18:In the week ending April 16, 2021, global wheat prices continued to rise because of bad weather in wheat-producing regions in Europe and the United States, threatening wheat growth. The weaker U.S. dollar exchange rate is also supportive to prices. However, US wheat export sales are sluggish and the prospects for wheat production in the Black Sea region have improved, restricting the increase in wheat prices.

   On Friday, the Chicago Board of Trade (CBOT) July soft red winter wheat futures rose approximately 14.50 cents from a week ago to close at 655 cents per bushel. The July hard red winter wheat futures on the Kansas City Futures Exchange (KCBT) closed at about 616.25 cents per bushel, up 22 cents from a week ago. The July hard red spring wheat futures on the Minneapolis Grain Exchange (MGEX) closed at 671.25 cents per bushel, up 10 cents from a week ago. Euronext’s September 2021 milling wheat period reported about 206.75 euros/ton, an increase of 7.25 euros from a week ago. The spot price of Argentine wheat was US$259/ton, down US$2 from a week ago, FOB price. The Zhengzhou Commodity Exchange’s wheat futures for delivery in September 2021 closed at about 2,762 yuan/ton, an increase of 2 yuan from a week ago.
   On Friday, the US dollar index closed at 91.54 points, down 0.7%from a week ago.
   The National Crop Progress Report released by the US Department of Agriculture on Monday showed that as of April 11, the heading rate of winter wheat in the United States was 5%, 4%last week, 6%last year, and the five-year average value was 7%. The excellent and good rate of winter wheat was 53%, the same as a week ago. The spring wheat planting progress is 11%, 3%a week ago, 5%in the same period last year, and the five-year average is 6%.
  Analysts pointed out that the dry weather in the wheat-producing regions of the United States and Europe raises concerns about wheat growth. Weather forecasts indicate that there may be cold weather in parts of Europe this weekend, while the dry weather in the northern plains of the United States will continue for at least a week, which is worrying about spring wheat planting. Although there has been rain and snow in North Dakota recently, it is not enough to alleviate the drought problem because the weather will become dry again next week. This weekend and in the next 6 to 10 days there will be cold weather in the southernmost part of the Great Plains, with the lowest temperature estimated at 32 degrees Fahrenheit. But if it stays below minus 30 degrees Fahrenheit for several hours, it may damage the wheat entering the heading stage.
   The US Department of Agriculture’s weekly export sales report shows that for the week ending April 8, net wheat sales in the United States for 2020/21 fell by 56,600 tons, setting a new annual low, significantly lower than last week and the four-week average. So far this year, the total US wheat export sales have reached 25,129,400 tons, slightly lower than the 2,521,700 tons in the same period last year.
   China Customs data shows that China’s wheat imports surged in the first quarter of this year, reaching 2.925 million tons, a year-on-year increase of 131.2%because of strong domestic demand.
  In the Black Sea region, the Russian analysis agency said that Russian wheat export prices rose last week because the Chicago Board of Trade (CBOT) soft red winter wheat and Paris milling wheat futures rose, supporting Russian wheat to end its five consecutive weeks of decline . Moscow analysis agency IKAR said that as of the end of last week, the Russian Black Sea port of wheat with a protein content of 12.5%​​was quoted at US$247 per ton, FOB price, up 2 US dollars from a week ago. The weather conditions in the agricultural production areas of Russia and Ukraine have been good in recent weeks, which is conducive to the growth of new crops. SovEcon said there will be more favorable rains in southern Russia this week. Both SovEcon and IKAR have recently raised their forecasts for Russian wheat production in 2021.
  APK-Inform said that Ukrainian wheat export prices fell further in the past week, down $7/ton from the previous week, because of the bright prospects for Ukrainian wheat production in 2021. As of Friday, Ukrainian premium milling soft wheat prices fell by 7 US dollars to 232-237 US dollars per ton, FOB prices in Black Sea ports. Feed wheat fell by US$7 to US$228-233 per ton, FOB prices in Black Sea ports. The Ukrainian government stated that due to the good weather, Ukraine’s cereal production is expected to reach at least 75 million tons this year, up from approximately 65 million tons in 2020.
   According to industry sources, some large wheat export companies in Russia have suspended the purchase of wheat because they are not yet ready to bear high export tariffs. According to sources, the export tariff on wheat is as high as $59/ton, so no one is willing to buy wheat.