What is Driving Wheat Market Volatility?
Since late December, U.S. wheat futures prices moved down through mid-January and have bounced up and down since then. For example, prices surged early the week of January 24 but lost steam by the end of the week. And the March ’22 hard red winter future price lost 4% as of Wednesday’s close. Such wheat […]
USDA Reports Reflect Why U.S. Farmers Seeded More Winter Wheat
Last week, USDA released three reports giving some indication of what may be ahead for the 2022 global wheat market. Those USDA reports were the monthly World Agricultural Supply and Demand Estimates (WASDE) report, the quarterly Grain Stocks report, and the annual Winter Wheat Seedings report. Considering all three reports, U.S. Wheat Associates (USW) notes […]
Fundamental Support for Wheat Prices Shared with USW Farmer Directors
By Michael Anderson, USW Market Analyst U.S. Wheat Associates (USW) represents the interests of wheat farmers in export markets. Each time the USW Board of Directors meet, we report on the latest market information that affects the U.S. wheat marketing environment. At their meeting the week of Jan. 10, 2022, our directors will see continued […]
Adjusting to USDA Estimates in a Record-Setting Year
Marketing year 2021/22 (June to May) has been record-setting to date. USDA estimates of global production, trade, and consumption have all outpaced previous years. However, since it’s initial 2021/22 World Agricultural Supply and Demand Estimates (WASDE), USDA has adjusted its forecast down, led by a 17 million metric ton (MMT) reduction in global wheat production […]
Stocks-to-Disappearance Ratio Suggests Continuing Wheat Market Volatility
By Michael Anderson, USW Market Analyst The Food and Agriculture Organization (FAO), a branch of the United Nations (UN), in a biannual report published this month, said “the ratio of major wheat exporters’ closing stocks to their total disappearance is expected to fall to 12.5 percent.” The report also noted that, if realized, this will […]
A Deep Dive into Ocean Freight Market Factors
The recent run-up in ocean market freight rates is causing heartburn for the world’s grain importers. Vessel rates bounced up on Nov. 22, but a shipbroker quoted in a Reuters report expects dry bulk spot rates to stabilize in November and December “before a seasonally soft first quarter of 2022.” That would be some good […]
Wheat Exporting Countries Control Just 18% of Global Stocks
By Michael Anderson, USW Market Analyst As the U.S. wheat 2021/22 marketing year reaches its halfway point, U.S. Wheat Associates (USW) summarizes market factors affecting global wheat supply and demand with its farmer board of directors. The data comes from USDA’s October reports, which will be updated on November 9. We want to share some […]
Freight Markets Ride the Waves of Uncertainty
Look at a line graph that tracks freight markets over the last two years and you may mistake it for the very waves the vessels traverse on the open ocean. Up and down the vessel goes, and so have the rates. The Baltic Dry Index (BDI), an assessment of the average cost to ship raw […]
Higher U.S. and World Wheat Prices Recall Another Bull Market
A surprising drop in USDA’s estimate of U.S. wheat production in the September 30 Small Grains Summary Report helped support the trend of higher U.S. and world wheat prices. The recent sustained run-up in prices calls to mind another (and even more challenging) bull wheat market beginning in marketing year 2006/07 and continuing through 2007/08. […]
How to Understand and Utilize the U.S. Wheat Associates Price Report
The U.S. farm families who produce wheat and the entire U.S. supply chain remain committed to operating a transparent and open market. How export prices are discovered is one of the reasons why our overseas customers know they can depend on the integrity of our supply chain, the quality of U.S. wheat and our unmatched […]