Wheat

A drought that’s hit wheat crops across the Black Sea region and Europe will force top buyer Egypt to pay more for supplies. The cheapest offer tender was more than $14 a metric ton higher than what Egypt’s state run buyer paid in its last purchase. The General Authority for Supply Commodities is seeking wheat for Sept. 1-10 delivery. Benchmark futures traded in Chicago have surged almost 20 percent this year and Paris wheat for December is trading near a record for the contract. Dry weather means Russian production will fall for the first time in six years and output in Ukraine will be lower than expected. GTCS made the lowest offer at $234.26 a ton including freight for Russian wheat. Egypt paid an average $220.25 a ton for 175,000 tons of Russian wheat in the last tender on July 10. The second-lowest offer was from Daewoo at $235.66 a ton, also for Russian grain.

Japan lifts temporary ban on Canadian wheat. Japan buys 62,957 tonnes of Canadian food wheat via tender

UkrAgroConsult cut its forecast for Ukraine’s 2018/19 crop year wheat harvest and exports due to a severe drought across the country during spring and the first half of summer. The agriculture consultancy reduced its wheat harvest forecast by 3.1 percent to 24.7 million tonnes, and exports to 15.5 million tonnes from 16 million tonnes forecast in June.

Food Corp of India sold 74,150 tn wheat in the first round of auction under the Open Market Sales Scheme of 2018-19 (Apr-Mar). In the first round of auction for the year, the agency offered 1.48 mln tn of the food grain. Usually response to sales tender under the Open Market Sale Scheme remains subdued during Jul-Aug and peaks during the lean supply season Sep-Oct. Last year, Food Corp of India had sold only 20,000-30,000 tn wheat through its first auction under the scheme.

Growers of all types held 5.19 MMT of cereals and pulses as of July 1, 2018, i.e. 8.6% more than on the same date a year ago (4.78 MMT). Wheat inventories as of July 1, 2018 were up 9.7% year-on-year at 4.58 MMT, including 4.15 MMT of milling wheat, 0.34 MMT of feed wheat and 0.1 MMT of wheat for seed. As of the reporting date, barley stocks totaled 306.4 KMT that is down 5% on the year, while those of corn were 28.9 KMT, rice – 41 KMT, rye – 9.7 KMT, oats – 64.6 KMT, buckwheat – 46.1 KMT, millet – 2.1 KMT.

June, the last month of MY 2017/18, traditionally saw a slowdown in wheat exports from Ukraine. 842 KMT was shipped abroad, or 17% less than in May (1 MMT) but 34% more than in June 2017 (627 KMT). The wheat export results of MY 2017/18 were slightly lower than in the previous season. Roughly 17.2 MMT of wheat was supplied to foreign markets that is just 1.6% below last season’s record of 17.5 MMT.

European wheat rose to its highest in more than a week, supported by a rally in Chicago and a lack of sellers amid uncertainty about the European harvest. December milling wheat, the most active position on Paris-based Euronext, unofficially closed up 3 euros, or 1.6 percent, at 189 euros ($220.36), its highest since July 6. Lack of selling interest, amid uncertainty over the size and quality of Europe’s harvest, continued to support French prices. The continuing French wheat harvest had reached northerly zones as a hot, dry spell favoured field work.

Wheat prices firmed up by Rs 20 per quintal at the wholesale grains market due to increased offtake by flour mills. However, other grains held steady in thin trade. increased offtake by flour mills against restricted arrivals from producing regions mainly led to rise in wheat prices.

Producers and analysts say the drought-starved Kansas wheat crop that a few weeks ago appeared better than expected, was now average to disappointing after some areas were pummeled by hail.

Wheat prices have shot up within two months after rise in the import duty. The Centre had raised the import duty by 10 per cent to curb imports of wheat in May this year and the wholesale prices have gone up by up to 10 per cent in last couple of weeks. Wheat, which was selling at Rs 1,750 per quintal, has crossed Rs 1,900 per quintal mark and traders claimed that it is expected to rise further. Rise in import duty could be one reason. Southern states generally procure wheat from other countries. However, this time they have not procured from outside. Increase in import duty is the reason they placed orders with the northern states. The open sell price of wheat has also been fixed at higher rate of Rs 1,900 and more for upcoming quarters.Retail prices have also gone up accordingly in Delhi.

Japan’s Ministry of Agriculture is seeking to buy 57,914 tonnes of food-quality wheat from the United States in a regular tender.

1st e-auction for sale of wheat and rice for the year 2018-19 shall be conducted on 19 July 2018 and the notice for the same shall be published on 16 July 2018. For Madhya Pradesh, Punjab and Haryana, reserve price for wheat for second, third and fourth quarter of FY 2018-19 will be taken as Rs. 190/-, Rs. 1925/- and Rs. 1950/- per quintal respectively. For Other States, railway freight, ex-Ludhiana to the nearest railhead and road transportation cost from railhead to depot, where sale is undertaken, will be added in the above reserve price. This reserve price includes loading and handling charges for all types of sales including dedicated movement. Quantum for sale of wheat has been fixed as 10 million tons, however it may be reviewed by the department of Food and Public Distribution (DFPD). if offtake is more.

Wheat inventory in the government’s central pool has touched a five-year high of 41.8 mln tn as of Jul 1. Higher inventories this year are mainly because of increased procurement in the country. Government’s wheat procurement for the current year started April was 35.5 mln tn, 15.8% higher on year till Jun 25.

In July-May 2017/18, wheat exports from Russia totaled roughly 38 MMT. This is already 41% more than in the whole of MY 2016/17, when some 27 MMT was shipped abroad. Russia exported 3.9 MMT of wheat in May 2018 that is 19.3% more than in the previous month and up 103% from May 2017. Vietnam imported 1.96 MMT of wheat in July-May 2017/18.

On July 10, Egypt purchased 175 KMT of milling wheat from Russia to be delivered on August 21 – 31, 2018 at an average price of USD 220.27/MT C&F. The price in the previous tender equaled USD 217.50/MT C&F.

Russia’s Agriculture Ministry plans to sell up to 1.5 million tonnes of wheat from the state grain reserve in the 2018/19 marketing season, which started on July 1. The draft proposal came in days after the Agriculture Ministry suspended plans for tenders to sell up to 500,000 tonnes of grain from its 4 million tonne grain stockpile to free up storage space and to reduce budget spending on servicing the stock. Between June 20 and July 4, it was offering the grain in small batches in the hope that buyers would then export it. It sold 122,539 tonnes of grain during the period.

Australian wheat exports are expected to drop by 31.8% in the current calendar year to 15 million mt.

Brazilian grain importers are aiming to buy up to 5.5 million mt of wheat from Argentina in 2019

Australian wheat production is forecast at 21 MMT for 2018/19, 12.5 percent below the official forecast, due to very dry and hot conditions across major wheat growing areas. The harvested area is expected to fall slightly to 12 million hectares. Wheat domestic consumption is estimated at 8.5 MMT for 2018/19. Australian wheat exports are forecast at 15 MMT for 2018/2019, reflecting lower production caused by poor rainfall and higher average temperatures.

Wheat prices rose further by Rs 30 per quintal at the wholesale grains market today on increased offtake by flour mills against restricted supplies from producing belts. Other bold grains also went up on uptick in demand from consuming industries. Besides increased offtake by flour mills, pause in arrivals from producing regions kept wheat prices higher.