Wheat

Export prices for Russian milling wheat with 12.5% protein closed the week within $185-188/MT FOB in Novorossiysk port for June delivery. This is on average down $4-5/MT year-on-year. Russian wheat exports in the latter half of the season are up 17.5% from last year. May wheat exports from Russia may approximate 1.6-1.8 MMT.

wheat contract climbed 0.5 % to $4.31-3/4 a bushel, having closed up 0.1 % on previous close. Wheat up half a percent on forecasts of hot, dry U.S. weather. Dryness and hot weather are causing concerns for the U.S. wheat crop.

Wheat prices fell 10 rupees in the wholesale markets of Delhi and Kota due to high supplies amid weak demand. Markets are flooded with wheat supplies as the country had a bumper harvest this year but demand from bulk buyers is weak. Although the government made high purchases to support prices and build their stocks, procurement has slowed now and this is further creating bearish sentiment in the market. NCDEX June contract ended down 0.1% from the previous close.

Planting of spring cereals and pulses was completed on an area of 24.839 million hectare (80% of the plan). This is 4.7% less than planted at the same time last year (26.077 million ha). Spring barley was sown on 6.517 million ha (84.6%) against 6.897 million ha in 2016, spring wheat on 10.250 million ha (75.6%) against 11.496 million ha in 2016, rice on 0.157 million ha (74%) against 0.172 million ha a year ago. Corn planting in Russia is 90% complete. The crop was sown on 2.747 million ha against 2.508 million ha 2016.

Egypt purchased 180 KMT of milling wheat from Russia and Romania with shipment during July 1–10, 2017 at an average price of USD 202.61/MT C&F. The price in the previous tender equaled USD 207.91/MT C&F. In the previous tender, on May 17, 2017 Egypt bought 295 KMT of milling wheat from USA, Russia, Ukraine and Romania with shipment during June 15–24, 2017.

The lowest offer at Egypt state grain buyer GASC tender was $191.46 per tonne free-on-board for 60,000 tonnes of Romanian wheat. Trading company ADM made the lowest offer on a cost & freight basis for 60,000 tonnes of Romanian wheat at $201.56 per tonne. GASC is seeking an unspecified amount of wheat from global suppliers for July 1-10 shipment.

Russia continued exporting wheat at a record pace in April 2017, when it supplied 1.96 MMT to foreign markets. This is 24% more than exported in April 2016 (1.58 MMT). This season wheat exports from Russia have totaled 23.77 MMT that is up 6% year-on-year. Shipments to Turkey shrank noticeably in April: their monthly total dropped to a season-low of 58 KMT. This is the smallest delivery since February 2015 (54 KMT).

Japan Ministry of Agriculture received no offers for feed-quality wheat or barley in a simultaneous buy and sell (SBS) auction that closed on Wednesday. The ministry had sought 120,000 tonnes of feed wheat and 200,000 tonnes of feed barley to be loaded by August 31, and arrive in Japan by October 31, in the tender that is usually conducted every week. It is seeking the same amounts for each grain to be loaded by September 30 and arrive in Japan by November 30 in a similar tender that will be held on June 7.

Wheat purchase has been close to 30 million tonne (MT) which is 6.8 MT more than the volume of grain purchased during the same period previous year. Punjab (11.6 MT), Haryana (7.4 MT) and Madhya Pradesh (6.7 MT) have purchased a major chunk of wheat since the procurement operations began on April 1. Only in Uttar Pradesh and Rajasthan the procurement operations are still going on while in the rest of key growing states, procurement operations have been completed.

Egypt, the world largest wheat importer, has bought 3.6 million tonnes of wheat from local farmers since the harvest began in mid-April. Egypt consumes 9.5 million tonnes of wheat to make its subsidized bread, 4 million tonnes from the local harvest and 5.5 million tonnes from imports.

In Indore, good-quality grain was sold down 5-10 rupees per 100 kg, while mill-quality wheat down 5-10 rupees per 100 kg. Now that government buying has stopped, farmers are bound to bring even the superior quality wheat to markets, leading to rise in supply. So, there is a steeper fall in superior quality wheat. The government has bought nearly 6.7 million tonne wheat from Madhya Pradesh. As of now, the government had no plans to extend the procurement scheme.

Overall, the Centre has procured 29.7 million tonne wheat across the country, up 29.6% on year but short of its initial target of 33 million tonne. In Uttar Pradesh, the largest wheat producing state, the the government has procured 2.7 million tonne wheat, close to target of 3.0 million tonne. In Punjab, the government has crossed the target of 11.5 million tonne and as of Monday, the procurement was at 11.7 million tonne, up 9.9% from a year ago. The government has procured 7.4 million tonne wheat in Haryana, up 10.1% on year, almost achieving the target of 7.5 million tonne.

The latest government update shows a quarter of the winter wheat crop in Kansas is in poor to very poor condition. 30 percent of the state wheat is rated in fair condition. About 38 percent is in good and 7 percent in excellent condition. Wheat coloring is at 39 percent. Hail in northwestern Kansas has damaged some wheat and recently planted spring crops. The southern half of the state was mostly dry this past week while areas in the north got up to two inches of rain.

Lower on technical selling and profit-taking after Friday 1.7 percent climb in the CBOT July contract, and spillover weakness from corn. Traders continue to monitor unfavorably wet conditions this month in the southern U.S. Plains and Midwest winter wheat regions. CBOT July soft red winter wheat was last down 3 cents at $4.35-1/4 per bushel, K.C. July hard red winter wheat last down 3-3/4 cents at $4.33-3/4 and MGEX July spring wheat last down 1-1/2 cents at $5.67-1/4.

Indicating that 80% of the US winter wheat crop was headed. Individual state data showed TX was 22% harvested, vs. the average of 15% for this date. Winter wheat conditions were down 2% g/e to 50%, but only lost 1 point on the Brugler500 index to 340. Spring wheat is 96% planted and 79% is emerged, with both now ahead of their 5-year averages but behind last year. The crop is rated 62% g/e, vs. last year at 79%.

USDA wheat exports of 602,913 MT for the week of May 25. That is an increase of 21.33% over last year but down 11.88% from last week.

Supplies to the market are high and they have further increased since government procurement stopped, demand, however, is subdued as there is ample stock with stockists. Government has procured nearly 6.7 million tonne wheat from Madhya Pradesh. Wheat prices remained unchanged in other major markets of the country. NCDEX June contract ended down 0.4% from previous close.

Bulgaria exported 3.92 MMT of wheat in MY 2016/17 by May 12, i.e. 20.6% more than for the whole last season. This result was achieved owing to a bumper wheat crop in the country in 2016 (5.65 MMT). Exports in the current marketing year are also expected to hit a record high. 62% of 2016/17 wheat exports went to European Union countries. This percentage equaled 65% in MY 2015/16.

Ukraine exported 1.2 MMT of wheat in April 2017 that is down 8% year-on-year (1.3 MMT in April 2016). When compared season on season, Ukrainian wheat exports are currently up 11% against July-April 2015/16 (15.8 MMT and 14.2 MMT, respectively). Following the closure of Indian demand, Egypt was the top destination for Ukrainian wheat exports for a second month in a row. Ukraine supplied 553 KMT of wheat to Egypt market in April, i.e. 46% of total exports that month and the largest volume since October 2013. Ukrainian wheat exports to Turkey expanded in the last two months. Turkey purchased 113 KMT of wheat from Ukraine in March-April. In total, Turkey imported 140 KMT of Ukrainian wheat in MY 2016/17 that is already 25% more than for the whole last season.

The food ministry has proposed to offer 4.8-4.9 million tonne wheat under the open market sale scheme during 2017-18 (Apr-Mar) marketing year. The ministry has proposed selling the grain at a base price of 1,791 rupees per 100 kg, including a minimum support price of 1,625 rupees, 125 rupees for incidentals, 41 rupees for loading and unloading. The sale is expected to begin by mid-June. In 2016-17, government sold 4.6 million tonne wheat at a base price of 1,640 rupees per 100 kg, against the initial plan to sell 6.5-7.5 million tonne. The Food Corp of India releases wheat and rice in the open market to boost supply of grains during the lean season and keep a check on market prices.