Wheat

Tunisia has bought around 75000 tonne of soft milling wheat in three consignments of 25000 tonne each. The first consignment was bought at $173.85/T C&F, second at $186.73/T C&F and third at $189.58/T C&F. The sellers were Europemarkets, Bunge and Nidera.

All contracts of wheat on the CBOT were trading nearly 1% higher with the most active July contract hitting a two-month high due to crop damage in the US. The July wheat contract was at $4.6075 a bushel, up 1.1% from the previous close. Snowfall in parts of Kansas and Oklahoma over the weekend damaged the wheat crop. Heavy rains and elevated temperatures also delayed wheat sowing in some parts of the country.

The government has procured 20.5 million tonne wheat in 2017-18 (Apr-Mar) up 13% from a year ago. Procurement was highest in Punjab where 8.8 million tonne of wheat has been bought so far, up 5.8% from a year ago. Centre has set a target of procuring 11.5 million tonne wheat from Punjab. The second-largest contributor was Haryana where the government has procured 6.4 million tonne wheat so far and is close to achieving its target of 7.5 million tonne for the 2017-18 marketing year. In Madhya Pradesh, another major producer of wheat, 4.2 million tonne has been procured so far, up 24.1% from a year ago. The government has set an 8.5- million tonne target for wheat procurement in Madhya Pradesh. Overall, the central government has set a target to procure 33.0 million tonne of wheat in the current marketing season that started April, up from 22.9 million tonne a year ago.

Prices of wheat rose in key wholesale markets of Kota and Indore due to lower supplies. In Rajasthan Kota market, prices rose by 20-25 rupees per 100 kg. Demand for wheat also increased as markets are going to be closed for weekend and on Monday for a local festival. Wheat prices also rose in Madhya Pradesh benchmark Indore market as harvesting has almost ended now and supplies are falling. Mill quality wheat was selling in Indore, up 10 rupees from the previous day. In key consuming Delhi market, wheat prices fell as arrivals from Uttar Pradesh, Punjab and Haryana are rising. Mill quality wheat was selling in Delhi, down 5 rupees from the previous close. The June contract ended down 0.2% from the previous close.

International Grains Council has raised its estimate for global wheat output in 2017-18 to 736 million tonne from 735 million tonne estimated a month ago. The projected output is 2.3% lower than 753 million tonne produced a year ago, Wheat output is likely to fall in major producing countries such as Australia, Canada, US, Ukraine, and Kazakhstan. Production of the grain is, however, seen higher in the European Union, Weak prices of wheat in global markets led to reduced plantings, and probability of a lower crop in 2017-18, global carryover stocks of wheat are likely to be at 239 million tonne in 2017-18, down from 240 million tonne a year ago but higher than 234 million tonne estimated in March, The global trade of wheat is estimated at 166 million tonne in 2017-18, unchanged from previous estimate but down from 171 million tonne a year ago, Global exports of wheat are likely to fall due to lower import demand from India as the country is looking forward to a record output this year.

Ukraine exported 1053 KMT of wheat in March 2017, or almost as much as in the same month last year (1070 KMT was in March 2016). the key end market for Ukrainian wheat was Egypt. Ukraine supplied a season-record 347.5 KMT of wheat to Egypt that month. This represented 33% of total exports at the time, The European Union also revived imports of Ukrainian wheat in March. That month the EU absorbed over 26% of all the supplies – 278 KMT. In addition, in view of the heightened tension between Russia and Turkey, shipments to the Turkish market became more active in March. 46 KMT of wheat was supplied to Turkey that month – the largest volume since the season beginning (a total 73.4 KMT in MY 2016/17). Ukraine exported a total 14.615 MMT of wheat in the nine months of MY 2016/17, or 13% more than at the same time last season (12.912 MMT went abroad in July-March 2015/16Г).

Wholesale prices of wheat rose due to firm demand. In market of Delhi, prices of wheat rose due to firm demand from godowns. The grain was quoted up 5 rupees from previous close. Demand from godowns and Stuckists was high, that from mills was weak. Arrivals of wheat in Delhi unchanged at around 40,000 tonne. Futures of wheat however were trading lower on the National Commodities and Derivatives Exchange on hope of rise in supplies as the arrival season peaks up. The most-active May wheat contract on the NCDEX ended down 0.7% from the previous close.

India wheat output, which has risen 40% over the last decade due to improved yield, could come under threat over the next 5-15 years because of global warming. For wheat, high night temperatures have a significant impact on yields, referring to in Africa where higher-than-usual night temperatures cut the wheat crop cycle by 19 days, resulting in a 30-50% fall in yields. Every 1 degree Celsius rise in average daily maximum and minimum temperatures tends to pull down the average wheat yield by 2-4%. Not just the (wheat) yield, but the nutritional value would also come down due to the gradual increase in the carbon dioxide in the atmosphere. Indian farmers are likely to harvest a record 96.6 million tonne wheat in 2016-17 (Jul-Jun), as against the 69.5 million tonne output in 2005-06.

CBOT wheat prices slumped (-6.23%). Price reduction in Chicago was triggered by the weather factor. Rains in winter wheat producing regions improved crop conditions. At the beginning of the week, 54% of crops were in good and excellent conditions (53% the previous week and 57% last year). This week meteorologists also forecast precipitation, which contribute to further crop conditions improvement. During April 06-13, contracting of the old-crop US wheat equaled 413.9 KMT (-11.2% compared to the same week last season).

The government aims food grain output of 273 million tonne in 2017-18, up from a record high of 271.98 million tonne estimated for this year.

India wheat output exceed the government official estimate of 96.6 million tonne and rise to 98-99 million tonne in the ongoing season that ends June. In 2015-16 (Jul-Jun), the country had produced 92.3 million tonne of wheat.

Prices of wheat were unchanged in wholesale markets of Indore. Arrival of the grain in Indore was at 10,000 bags (1bag=100kg), also unchanged from previous close. The government procured 3.6 million tonne wheat in Madhya Pradesh, up nearly 15% on year. In Delhi, wholesale market, prices remained unchanged in a thin trade because of steady demand and arrivals. Nearly 40,000 tonne wheat has been arriving daily in the Delhi market. At Kota in Rajasthan, prices of the grain fell. The mill quality wheat was sold down 20 rupees from previous close. On an average, 30,000-40,000 bags of wheat arrive in Kota daily. The most active May contract of wheat on the NCDEX ended down 0.2% from the previous close.

Ukraine boosted its grain exports to 4.54 million tonnes in March up 52 percent from 2.98 million tonnes in February. Exports of wheat rose to 1.05 million tonnes from 840,000 tonnes a month earlier. A stronger harvest would likely raise the 2017/18 grain export forecast to 39.5 million tonnes from 38.8 million tonnes. Ukraine’s agriculture ministry forecasts grain exports for the period at a record 42 million tonnes.

Russian wheat export prices fell due to low activity in the market ahead of the new crop arrival this summer and because of a continuing trade dispute with Turkey. Russia exported 29.8 million tonnes of grain, including 23.0 million tonnes of wheat down 0.5 percent year-on-year. Russia wheat crop is expected to fall this year, but the country stockpile remains high after a record crop in 2016, and the number of sale offers from farmers is rising. Russia grain stocks at farms and procurement and processing companies, excluding small farms, were up 19 percent from a year earlier at 28.3 million tonnes. Domestic prices for third-class wheat fell 100 roubles compared with the week earlier to 9,500 roubles ($170) a tonne in the European part of Russia on an ex-works basis. Farmers had sown spring grains on 11 percent of the planned area, or on 3.4 million hectares, compared with 4.2 million hectares a year ago.

The offtake of imported wheat from ports in south India has picked up due to good demand from millers and Stuckists in the region. Traders in south India imported wheat is cheaper than that ordered from northern part of the country. South Indian buyers do not expect prices to fall and are resorting to the imported grain. At present, there is nearly 1.3 million tonne wheat stocked at ports and it is likely to be sold in the next two-to-three months. In south India, imported wheat is available at low cost as compare to domestic wheat costs.

Prices of wheat rose in the benchmark market of Indore, Madhya Pradesh, as arrivals fell due to government procurement in the state. In Indore, arrivals had peaked around 20,000 bags (1bag=100kg). Arrivals fell sharply to 5,000 bags. The grain was sold up 20-30 rupees from previous close. The government has procured 3.6 million tonne of wheat in Madhya Pradesh since the beginning of April, up nearly 15% on year. The most active May contract of wheat on the NCDEX ended down 0.9% from the previous close.

Delhi wheat down on low demand from coastal states. Mill-quality wheat was sold down 20 rupees in Delhi from previous close. Coastal states of Maharashtra, West Bengal, and south Indian states have already imported wheat for their stocks lower than the prevalent prices in north India. This has led to lower demand from these states. Arrivals in Delhi were around 35,000 bags (1bag=100kg). Prices have fallen as demand for wheat from Mumbai, West Bengal, and southern states is weak as there is a lot of imported wheat stocked at ports. India wheat imports in 2016-17 (Apr-Mar) are estimated at a record high 5.5 million tonne of the total imported wheat, nearly 2 million tonne is still unsold.

The government today said it has procured 16.5 million tonne wheat since the start of the fiscal year this month, up 12.8% from a year ago. The procurement was the highest in Punjab, where the government has purchased 6.4 million tonne wheat so far, up 12% from the year-ago period. In Haryana, another major producer of wheat, the government has bought 5.7 million tonne of the grain, up 5.6% from a year ago. The government has purchased 3.6 million tonne wheat in Madhya Pradesh, up nearly 15% on year, while in Uttar Pradesh, it has bought 321,105 tonne so far, sharply higher than 105,246 tonne in the year-ago period. The Uttar Pradesh government has set a target to procure 8 million tonne wheat this year, much above the central government’s 3-mln-tn target for the state. The central government has set a target to procure 33.0 million tonne of wheat for the current marketing season, up from 22.9 million tonne a year ago.

Exports of wheat from Australia in 2017-18 (Oct-Sep) are likely to fall by 18.2% on year to 18 million tonne due to transportation problems. Strong exports of pulses and canola due to higher demand for these commodities may lead to a hassle in transportation facilities and is likely to hit wheat exports. The port and logistical problems due to a shortfall in shipping containers may hamper wheat exports. Australia caters to a significant part of India wheat imports. India is also expected to import lesser wheat this year due to a bumper crop at home.

Bangladesh wheat imports go up to 57 lakh tonnes in 2016-17 due to record low prices in the international market and comparatively high prices in the local market. The country imported 43.66 lakh tonnes of wheat in fiscal 2015-16. The forecast came after import of the grain rose 45 percent year-on-year to 44.75 lakh tonnes in July-March of fiscal 2016-17. The private sector accounted for 94 percent of the total wheat imports during the period. Bangladesh meets 75 percent of its wheat consumption needs through imports, sourcing lower quality wheat from Russia and Ukraine, and higher quality wheat from Canada, Australia and the US. 40 percent of wheat imported was sourced from Russia and 30 percent from Ukraine during 2016-17. The USDA, however, cut its estimate on wheat production to 12.75 lakh tonnes for fiscal 2016-17 because of a decline in plantation last winter. Wheat production was 13.48 lakh tonnes in fiscal 2015-16, posting marginal gain. The cereal import has been rising fast since fiscal 2012-13 spurred by increased consumption. The country imported 37.84 lakh tonnes of wheat in fiscal 2014-15.