News

Prices of wheat were down in spot markets ahead of the rollout of goods and services tax. Wheat buyers are waiting for the implementation of the tax reform as it would do away with state taxes. Prices in Delhi have fallen by 30-40 rupees in last 10-15 days. NCDEX the most-active August wheat contract ended down 0.1% from previous close.

International Grains Council has cut its estimate for global wheat output in 2017-18 to 735.1 million tonne from 735.9 million tonne forecast a month ago. The downgrade may be attributed to fall in output in the US, European Union and Australia, the report showed. The losses were, however, limited by higher production in Russia. The council has pegged global wheat consumption in 2017-18 at 735.5 million tonne, sharply down from 737.8 million tonne estimated earlier. Global ending stocks of wheat in 2017-18 are estimated at 241.2 million tonne, up from 238.6 million tonne forecast in May.

The recent rally in prices of wheat in the global market has caught the Indian market by surprise. Market players, who were banking on cheaper imports to meet demand in the lean arrival season, would now have to turn to the domestic market to source wheat and that could effectively push up wheat prices by about 200 rupees per 100 kg over the next couple of months. Wheat prices usually start ascending by Jul-Aug as arrivals come to a grinding halt and government winds up procurement operations. The government offer price under the open market sale scheme usually acts as a benchmark for wheat prices during the lean season.

Price growth persisted in Russia new-crop wheat market last week. In Novorossiysk port, export prices for Russian milling wheat closed the week up another $2-3/MT at $185‑187/MT FOB for 12.5%-protein wheat and $177‑180/MT FOB for 11.5%-protein wheat.

U.S. wheat prices jumped 4 percent to hit their highest in nearly two years as forecasts for continued dry weather in key U.S. growing regions stoked fears over possible production losses. The most active wheat futures on the Chicago Board of Trade had risen 4 percent to $5.47-1/4 a bushel, the highest since July 20, 2015.

Russia continued exporting wheat at a record pace in May 2017, when 1.92 MMT was shipped abroad. This is 46% more than exported in May 2016. This season exports of Russian wheat have gained almost 2 MMT (8.4%) against the same time last year and reached 25.74 MMT. Russian wheat exports to the Egyptian market have hit a five-year high in the current season. Russia supplied 6.63 MMT to Egypt in the eleven months of MY 2016/17. The previous record was registered in MY 2011/12 (roughly 7.35 MMT).