Wheat

The government has procured 15 million tonne wheat in 2017-18 (Apr-Mar) up 12.1% from a year ago. Punjab has surpassed Haryana to become the highest contributor to the government’s procurement drive. The government has so far purchased 5.5 million tonne wheat from farmers in the state, up 13.5% from the year-ago period. In Haryana, the government has bought 5.4 million tonne wheat, up 3.4% from a year ago. The government has purchased 3.4 million tonne wheat in Madhya Pradesh, up 12.9% on year, while in Uttar Pradesh, it has bought 267,995 tonne so far, sharply higher than 77,807 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- million tonne target for the state. The state government has also offered an incentive of 10 rupees per 100 kg for loading and transportation of the crop, Overall, 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.

Wheat prices in key wholesale markets of the country remained unchanged as government procurement offset high supplies the government has procured 15 million tonne wheat for the 2017-18 (Apr-Mar) marketing season, up 12.1% from a year ago. Taking cues from spot markets, the most active May wheat contract on the National Commodity and Derivatives Exchange closed flat. The contract ended down 0.1% from the previous close. The most active July wheat contract on the CBOT was at $4.36 a bushel, up 0.4% from the previous close.

Turkey is a key country-importer of wheat bran from Ukraine. In the current season the country started gradually increasing the purchasing volumes. July-February of 2016/17 market year Turkey imported almost 352 thousand tonnes of Ukrainian wheat bran, an increase of 14% compared with the same period in 2015/16 market year (309.9 thousand tonnes), and up 4% compared with July-February of 2014/15 market year (337.8 thousand tonnes). Generally, in 2015/16 market year Ukraine supplied 475.8 thousand tonnes of wheat bran to Turkey, up 2% compared with 2014/15 market year (467.8 thousand tonnes). Turkey increased its share among foreign buyers of wheat bran from Ukraine. Thus, in 2014/15 market year the share of Turkey totaled 91% in the export structure, and in 2015/16 MY – 86%, but in the current market year the figures will grow to 98%.

U.S. grain futures edged higher on previous close, boosted partly by a weaker dollar, although the scope for a significant rebound in prices appeared to be capped by ample supplies. Chicago Board of Trade wheat for May delivery was up 0.5 percent at $4.21-1/4 a bushel at 1034 GMT. The most active contract had dipped to a low of $4.17-1/2 on Wednesday, the lowest since March 31.the market remained weighed by abundant global supplies although the prospect of lower crops in the Black Sea region helped to underpin prices. Wheat crop in Russia was forecast to fall by 9 percent from last year to 66 million tonnes while a decline in production was also anticipated in Ukraine. Lower exports from Russia and Ukraine are likely to help reduce the supply glut witnessed in global grains market. May milling wheat was down by one euro or 0.6 percent at 163.50 euros a tonne.

Wheat consumption in Jordan is forecast to remain virtually unchanged in the 2017-18 marketing year. At 1.32 million tonnes, the forecast for 2017-18 was up only marginally from 1.318 million tonnes during the 2016-17 marketing year. The flat forecast is in stark contrast to previous years, when Jordan experienced unprecedented growth in consumption due to the influx of Syrian refugees and a testing economic environment. Production of wheat is negligible in Jordan, with the country only turning out about 25,000 tonnes per year, a figure that is expected to remain unchanged in 2017-18. Wheat imports also are forecast flat, at 1.3 million tonnes.

The government does not plan to hike import duty on wheat to 25% from the current 10%. There was no immediate need to raise the duty, as prices were above the minimum support price in most market. Procurement was progressing well and the harvest this year was also good. The government had on Mar 28, imposed 10% customs duty on import of wheat to prevent fall in prices following a bumper crop in the country this year.

Madhya Pradesh is likely to produce a record 22.5 millon tonne wheat in the crop year ending June due to higher acreage and better yield. The second largest producer of wheat is 22% higher on year and even above the previous estimate of 21.0 millon tonne pegged in January. Higher minimum support price has also encouraged farmers to grow more wheat this year. Adequate showers during monsoon led to better yields for and wheat this year.

Wheat prices in major wholesale markets across the country were stable despite high arrivals, as government procurement restricted any fall. Mill-quality wheat was being sold unchanged from previous close. A total of 20,000-30,000 bags (1bag=100kg) of wheat arrive in Punjab daily and arrivals are likely to double by the end of April. Wheat prices were unchanged in other major markets of Uttar Pradesh and Haryana. Prices of the grain fell by 20-30 rupees in Delhi market due to high arrivals from Punjab and Madhya Pradesh. As of Tuesday, the government had procured 11.9 million tonne wheat for the current marketing year that started April, 13.7% higher than in the year-ago period. The May wheat contract on the NCDEX ended at 1,650 rupees per 100 kg, up 0.4% from previous close.

Production of wheat in Bangladesh is expected to be higher in 2017-18 (May-Apr). Production of wheat is rising in the country by 2.3% to 1.3 millon tonne because of higher acreage, which may grow by 5,000 ha to 420,000 ha.

Severe cold came to Ukraine early this week. Due to an intrusion of arctic air, night air temperatures dropped to subzero values, even snowfalls occurred in the eastern regions. Because of the deterioration of weather conditions, planting of spring cereals in Ukraine slowed down. Early spring cereals and pulses had been sown on 2228 thosand hactare by April 18 – this is 3.5% less than at the same time last year. Planting of spring wheat lags slightly: 155 thousand hactare planted to date against 156 thousand hactare in 2016.

In 2016, Ukraine exported more than 5.5 millon tonne of wheat and 841 thousand tonnes of oilseeds to Egypt, or over 12% of the general Ukrainian exports of the reporting products. Ukraine has a very responsible approach to the phytosanitary condition of grains for exports. And Egypt is one of the main countries-importers of Ukrainian grains. Ukraine takes the leading positions in global grain exports, due to its geoclimatic conditions and active rates of agricultural development. In 2016, Ukraine managed to increase the exports of grains and oilseeds by over 7% compared with the previous year – to 44.4 millon tonne.

The government has procured 11.9 million tonne wheat so far in the current marketing year that started April, 13.7% higher than in the year-ago period. Haryana tops the procurement list, with farmers in the state selling 4.7 million tonne wheat to the government, higher than 4.5 million tonne a year ago. In Punjab, the government has so far purchased 3.7 million tonne wheat from farmers, up 21.5% from a year ago. The government has purchased 3.1 million tonne wheat in Madhya Pradesh, up 8% on year, while in Uttar Pradesh, it has bought 156,004 tn so far, sharply higher than 48,639 tonne in the year-ago period. The Uttar Pradesh government has set a target to procure 8 million tonne wheat this year, way above the central government’s 3-mln-tn target for the state. Overall, the central government has set wheat procurement target for this marketing season at 33 million tonne, up from 22.9 million tonne a year ago.

Over the last week, the air temperature in most of the country was a few degrees above its normal values. Precipitation of various intensities occurred all over Ukraine in the form of rain. From January 1 till April 10, many parts of Kherson, Odesa, Mykolaiv and Kirovohrad regions received at most 30-60% of normal precipitation rates for this time, therefore the recent week’s cold-spell turned out to be a beneficial factor curbing the drought development in these regions. The March-April weather conditions in Ukraine were generally favorable for crop planting and growth. The accumulated amounts of warmth and moisture supply in most of Ukraine’s crops were still at fair and optimum levels. As of today, over 70% of winter wheat crops are at the tillering stage. In fact, they have caught up with the fall lag caused by abnormally cold October and November. Roughly 30% of crops are in fair condition with a steady trend toward improvement.

Russian grain exports are expected to dip between 3 and 3.1 million tonnes in April from the 3.8 millpn tonnes shipped in March, owed to a drop in Turkish purchases. Turkey, the world’s second largest buyer of Russian wheat after Egypt, is said to have placed its wheat, corn and sunflower imports on hold by imposing high import tariffs from mid-March. However, the loss of the Turkish market is likely to be temporary.

The Ag Ministry of Ukraine raised its forecast for the country’s 2016/17 grain exports from 41 MMT to 42 MMT. The grain export forecast for Ukraine envisages 16.6 MMT of wheat exports, 5.6 MMT of barley, 19 MMT of corn and 1 MMT of other cereals. Ukraine exported some 35.4 MMT of cereals in the 2016/17 season by April 2017, including 15.4 MMT of wheat (of which 10.1 MMT is milling wheat), 14.9 MMT of corn, roughly 4.9 MMT of barley.

In Indore, the grain was sold down 25 rupees from previous close. Around 750,000 bags (1bag=100kg) of wheat arrived in Madhya Pradesh up from 400,000 bags. In Delhi, another key wholesale market, 40,000 bags of wheat arrived dragging prices down 20 rupees. Futures contracts of wheat on the National Commodity and Derivatives Exchange ended higher due to bargain buying. The April contract of wheat ended up 0.2% from the previous close. Prices on the NCDEX had fallen earlier tracking a decline in spot markets on the back of an increase in supplies.

Wheat prices fell in the benchmark markets of Indore, Madhya Pradesh and Delhi due to abundant supply. In Indore, wheat was sold down 50 rupees from previous close. while in Delhi, prices were down 20 rupees at previous close. Around 600,000 bags (1bag=100kg) of wheat arrived in Madhya Pradesh up from 450,000 bags. In Indore arrivals were at 40,000 bags. In Delhi, around 30,000 bags arrived. Uttar Pradesh and Haryana, almost double the number of bags that arrived. In Kota’s wholesale market in Rajasthan, prices fell by 5-10 rupees due to high arrivals in markets. Supplies in Rajasthan are already at their peak and about 150,000 bags of wheat arrive in the market daily wheat prices fell also on the National Commodity and Derivatives Exchange.

Government held 8.06 million wheat in its stocks at the beginning of the current marketing year, sharply lower than 14.54 million tonne last year. Govt stocks are lower this year due to poor output in the last two years, and high sales through the govt open market auctions to manage supply in wholesale markets. Stocks are likely to be replenished that the government has already started wheat procurement for the current marketing year and aims to purchase 33 million tonne against 22.9 million tonne bought last year. Govt has procured 3.9 million tonne wheat from farmers across the country, up 7.4% from a year ago.

Wholesale prices of wheat were unchanged in Indore, Madhya Pradesh, primarily due to the govt procurement of the grain from farmers to check a fall in prices and build up stocks. Government is procuring wheat from farmers in the state at a MSP and has procured 2.1 million tonne of wheat in the state. Around 30,000 bags (1bag=100kg) of wheat arrived in the market almost unchanged from the previous day. Around 20,000 bags of wheat arrived in Delhi, mainly from Uttar Pradesh, higher than 15,000 bags.

More than 37.15 lakh tonne wheat has arrived so far in the mandis of Haryana. Of the total arrival, the 5 government procuring agencies have purchased 37.12 lakh tonne and traders have purchased 3,000 tonnes of wheat at MSP. More than 9.36 lakh tonne wheat has been procured by Food, Civil Supplies and Consumer Affairs Department, where as Haryana State Co-operative Supply and Marketing Federation Ltd (HAFED) has purchased more than 12.54 lakh tonne wheat. FCI has purchased more than 4.25 LT wheat, Haryana Agro Industries Corporation have purchased more than 3.09 LT and more than 7.85 LT wheat has been procured by Haryana Warehousing Corporation. District Kaithal leading in wheat arrival where more than 4.71 lakh tonne of the crop had been procured followed by district Karnal, which recorded more than 4.61 lakh tonne.