Wheat

Chicago wheat futures slid on Monday as the market took a breather after rallying around 5 percent in the last two sessions on the back of dry weather hitting U.S. yields. Chicago wheat climbed to its highest in almost a year at $4.68-1/2 a bushel on previous close as dry weather threatened to reduce U.S. spring wheat crop production. Reports of disappointing yields in early harvesting of hard red winter wheat provided additional support. There have been weather concerns for corn as well as spring wheat in the U.S.

Wheat prices on the Chicago Board of Trade are likely to rise 10-15% to $5 per bushel in a year. The area under wheat has reduced in the US, leading to lower growth in stocks, while in the European Union, yields are not expected to reach the average of recent years due to unfavourable weather. On a global scale, the stocks-to-demand ratio for wheat has reached 33%, which Rabobank said was too high, adding that a high ratio would dampen prospects of a significant recovery in global wheat prices in the coming season.

Wheat prices were unchanged in Delhi markets amid thin trade. In Delhi, mill-quality wheat was sold at 1,740-1,750 rupees per 100 kg. Demand for the grain has declined as buyers are cautious and do not want to hold inventories ahead of the goods and services tax regime. The July contract on the NCDEX was trading at 1,628 rupees per 100 kg, up 0.5% from the previous close.

In Delhi, mill quality wheat was sold at 1,740-1,750 rupees per 100 kg and in Kota, it was quoted at 1,500-1,530 rupees per 100 kg. Markets in Indore were shut, but are likely to re-open on Friday. The July wheat contract on the NCDEX ended at 1,617 rupees per 100 kg, down 0.06% from previous close.

Prices of the new crop wheat for January delivery in Australia touched a one-year high of A$265 a tonne (13,000 rupees) due to concerns over dry weather in the western part of the country. In western Australia, where the new crop has been planted, soil moisture is currently at record low and the weather bureau has forecast high temperature and little or no rainfall next week. The country is already grappling with low output concerns and wheat production in 2017-18 is seen 31% lower on year at 24.2 million tonne.

Wheat climbed to its highest since early May with the market on track for a second week of gains as dry weather in parts of North America threatens to reduce yields. Wheat earlier rose to as much as $4.58-1/4 a bushel, the highest since May 2. Wheat is rallying on concerns that recent dry weather will curb the output of the U.S. spring crop. North American spring wheat crops remain too dry and weather forecasters do not expect that to change.

Japan Ministry of Agriculture bought a total of 162,286 tonnes of food-quality wheat from the United States, Canada and Australia in a regular tender.

In Aktobe and West Kazakhstan regions, spring wheat crops are at stages ranging from germination to three leaves, locally tillering. Plant condition is good and fair.

Delhi Rs.1852-1866; Kerala Rs.2153-2178; Karnataka-Rs.2084-2118. Invites also floated for other states too. As earlier Govt declared that wheat from Punjab/Haryana/Madhya Pradesh would sale at Rs.1790 excluding the transportation and other charges. India wheat procurement crosses 30.5 MMT, last year same time 22.96MMT.

Wheat procurement in Rajasthan has been extended by a fortnight and will now continue till Jun 30. So far, the government has purchased 1.21 million tonne wheat in the state for the 2017-18 marketing year (Apr-Mar), nearly 60% higher than a year ago. Government may purchase 1.25 million tonne from the state by the time the procurement ends. Overall, the government has so far purchased 30.5 million tonne wheat across the country, up 32.8% from a year ago.

Wheat prices inched up by 0.50 per cent to Rs 1,614 per quintal in futures trade as speculators built up fresh positions amid uptick in demand in the spot market. At NCDEX, wheat for delivery in July rose by Rs 8, or 0.50 per cent, to Rs 1,614 per quintal, with an open interest of 25,360 lots. Analysts attributed the rise in wheat futures to fresh positions created by traders due to pick up in demand from flour mills in the physical market amid pause in supplies.

The government had 33.4 million tonne wheat in its stocks as of Jun 1, up from 32.6 million tonne a year ago. Government stocks have risen due to higher procurement this year. Larger purchases by government are likely to take wheat stocks in central pool to a comfortable situation this year after they fall to multi-year low last year.

The Australian Bureau of Agricultural and Resource Economics and Sciences has forecast the country wheat output in 2017-18 (Apr-Mar) at 24.2 million tonne, down 31% from previous year’s record high of 35.1 million tonne. The decline may be largely attributed to around 1.3% fall in wheat acreage to 12.7 million tonne.

France AgriMer raised forecast for French soft wheat stocks at the end of the 2016/17 season to 2.7 million tonnes from 2.4 million estimated last month. The increased stocks outlook notably reflected a 200,000 tonne cut to forecast French soft wheat exports outside the European Union in 2016/17 to 5.0 million tonnes.

The country association of farm cooperatives said German wheat benefited from rain in recent weeks and an increase in both crops is expected in the 2017 harvest. Germany 2017 wheat crop increase 3 percent on the year to 25.20 million tonnes. In its last estimate in May, association forecast a German 2017 wheat crop of 24.98 million tonnes.

U.S. wheat futures edged higher, recouping much of the losses from the previous session, as concerns over potential yield losses from recent dry weather lent support to prices. CBOT wheat futures rose 0.2 percent to $4.43-3/4 a bushel, having closed down 0.44 percent on previous close.

Syria has received 225,000 tonnes of Russian wheat, part of a 1.2 million tonne wheat deal struck in February through its state grain buyer. Syria one-million tonne tender execution still on hold Hoboob so far purchased 32,000 tonnes of local wheat. Syria has so far procured only around 32,000 tonnes of wheat but the buying season will go on until August. It expects the country to produce 2.17 million tonnes of local wheat in the 2017 season.

In Delhi, mill-quality wheat was sold at 1,755 rupees per 100 kg, while the grain was quoted at 1,518 rupees in Kota. Markets in Indore have been shut for nearly 15 days due to ongoing protests by farmers in the state. Futures contracts of wheat on the NCDEX were flat, with the most active July contract ending at 1,610 rupees per 100 kg, unchanged from the previous close.

USDA adjusted its forecast for the 2017 Arkansas wheat production, dropping by 8 percent between May 1 and June 1 to about 6.05 million bushels. The yield forecast dropped from 60 bushels per acre in May to 55 bu/ac in June. The state total acreage for winter wheat dropped by about 5,000 acres from 2016 to about 110,000 acres in 2017, but remained unchanged from May to June.

Australia slightly raised its forecast for 2017/18 wheat production on as favourable weather along the country east coast looks set to boost output. Australian wheat production is expected to total 24.19 million tonnes up nearly 1 percent from its March forecast of 23.98 million tonnes.