Wheat Letter Blog Archive - Page 5 of 104

Volatile Wheat Markets Highlight Unexpected Opportunities

In late May, U.S. Wheat Associates (USW) reported on bullish wheat market sentiment, driven by adverse weather and changing supply and demand conditions. Since then, the volatility that has remained a constant in wheat markets for more than two years returned. From May 24 to June 21, CBOT, KCBOT, and MGEX wheat futures dropped 69 cents, 55 cents, and 58 cents, respectively.

Until global supply and demand is more defined, markets will remain sensitive to changes in weather, perceived consumption, and supply shifting events. However, the recent volatility may help illuminate unexpected buying opportunities for U.S. wheat.

Line chart shows volatility in the wheat market from March 2022 through May 2024

Markets have been volatile over the last few months. From May 24 to June 21, CBOT, KCBOT, and MGEX wheat futures dropped 69 cents, 55 cents, and 58 cents, respectively. Source: U.S. Wheat Associates Price Report.

A Series of Trend Reversals

In March 2024, markets hit multi-year lows as ample wheat stocks from Russia and record Black Sea exports weighed on global wheat prices. Starting in April, the market’s “weather eye” saw drought conditions and severe frost damage in central and southern Russia prompting a reversal and prices rallied back to 2023 levels. Confirmed by the June World Agricultural Supply and Demand Estimates (WASDE), the Russia production estimates decreased by 8.5 MMT on the year to 83.0 MMT, the lowest level since 2021/22. Likewise, persistent wet, cool weather and flooding decreased the European Union (EU) planted area and diminished French and German yield potential, resulting in a yearly decrease of 3.7 MMT to 130.5 MMT.

This world map from USDA shows changes in wheat production contributing to volatility in world markets.

The June WASDE decreased Russia production estimates by 5.0 MMT to 83.0 MMT, due to drought conditions and severe frost damage. Like wise, persistent wet, cool weather and flooding in the EU prompted USDA to decrease production by 1.5 MMT to 130.5 MMT. Source: USDA Wheat Outlook.

The June WASDE decreased Russia production estimates by 5.0 MMT to 83.0 MMT, due to drought conditions and severe frost damage. Like wise, persistent wet, cool weather and flooding in the EU prompted USDA to decrease production by 1.5 MMT to 130.5 MMT. Source: USDA Wheat Outlook

Adding further strain on the market, rumors began circulating that India may begin importing wheat, with stocks sitting at 7.5 MMT, the lowest in 16 years. In response to supply strains, wheat futures prices climbed throughout April and May, touching levels not seen since Fall 2023 and adding support to world cash values.

Meanwhile, on June 6, major world importer Türkiye announced a ban on wheat imports from June 21 through October to control domestic prices. Adding validity to the claims, the June WASDE reduced the Turkish import forecast from 10.5 MMT to 9.5 MMT. The announcement suggested weakened demand prospects and sent markets lower. Contributing to the new narrative, private analysts also suggested the impacts on Russian yields were not as severe as predicted. Furthermore, the U.S. production outlook now seems more favorable and harvest progress continues rapidly. As of June 23, 40% of the winter wheat crop is in the bin, while conditions in the remaining acres sit at 52%, up from 40% last year. Similarly, 71% of spring wheat rates good or excellent, a 21-point jump from the previous year.

The combined impacts of Türkiye, alleged improvements to Russia production, and the U.S. harvest has depressed prices, bringing them back in line with, or in the case of HRS slightly below, their position in March 2024.

Eyes Out for Opportunity

Despite the recent volatility, the spread between competing origins has narrowed over the last few weeks. According to AgriCensus price data, as of June 21, Russian, French, Romanian, and Soft Red Winter hovered in a narrow range between $230-$235/MT, a considerable decrease from the $17/MT spread between Russian wheat and the next cheapest origin noted in March. Likewise, Gulf HRW prices trend lower, with the June 21 U.S. Wheat Associates Price Report putting Gulf HRW with 11.5% protein at $243/MT, in line with German and Polish origins and only $12/MT above Russian prices, a much closer spread compared to a $67/MT difference observed in March 2024.

As U.S. wheat prices align more closely with other export prices, it presents a chance for international buyers to take advantage of the recent price trends. Supported by exceptional quality, a dependable supply chain, and unsurpassed customer service from USW colleagues, U.S. wheat offers an exceptional value.

This line chart shows the relationships and volatility in the global wheat market.

The June 21 U.S. Wheat Associates Price Report put Gulf HRW with 11.5% protein at $243/MT, in line with German and Polish origins and only $12/MT above Russian prices, a much closer spread compared to a $67/MT difference observed in March 2024. Source: AgriCensus Price Data and the U.S. Wheat Associates Price Report.

June 26, 2024/by Steve Mercer

durum, Northern Durum, Wheat Research

U.S. Wheat Industry Stands to Benefit from North Dakota State University Expansion

Above photo: USW Secretary-Treasurer Jim Pellman; NDWC Board Member Jim Bahm; Past NDWC Chairman Greg Svenningsen; and past NDWC Chairman David Clough at the dedication of the Peltier Complex on the campus of North Dakota State University.

U.S. Wheat Associates (USW) brings multiple teams of bakers and millers from around the world to the Northern Plains each year to learn about spring and durum wheat production and research. New facilities for one of its biggest partners in the region are expected to improve that education and experience for international customers.

Two Separate but Related Facilities

North Dakota State University (NDSU) recently dedicated the new Peltier Complex, home of the school’s food science, cereal science, meat science, and bioprocess engineering programs. The Northern Crops Institute (NCI), the North Dakota Trade Office, and laboratories for the U.S. Department of Agriculture’s Agricultural Research Service are part of the new facility on the Fargo campus.

Visitors tour the new lab milling room that is part of the Peltier Complex.

And, as NDSU was dedicating the Peltier Complex in mid-June, it was also hosting a groundbreaking ceremony for the Bolley Agricultural Laboratory, which will house agricultural research programs such as plant pathology, plant breeding, weed science, agronomy, soil science and horticulture. The new lab will be located on the western edge of NDSU’s campus and will overlook agricultural plots immediately adjacent to campus.

A Place to Create, Solve

Construction on the Bolley Lab is expected to begin later this summer.

“The Peltier Complex will be a facility unlike anything else we have ever constructed at NDSU,” said Greg Lardy, NDSU’s vice president for agricultural affairs. “It will be the largest single academic building project in NDSU history.”

The Peltier Complex will bring together scientists, teachers, and students to work on the development of new products and solutions. It also brings together farmers and their customers from international markets.

“Wheat farmers in North Dakota recognize the need for updated facilities that benefit NDSU’s wheat research, and also helps the North Dakota Wheat Commission and its partners continue to promote the high-quality wheat we grow in the state,” said USW Secretary-Treasurer Jim Pellman, a NDSU alumnus who earned a degree in Agriculture Economics from the school and today grows wheat on his family farm near McClusky, N.D. “The University’s impact on the wheat industry can grow with new laboratories and more space. The new bake lab and pasta lab, along with the new milling area, will be valuable assets when international teams are brought to North Dakota to learn about U.S. wheat.”

North Dakota State University held a ceremonial ribbon cutting in mid-June to celebrate the Peltier Complex, a state-of-the-art agricultural facility designed to better serve NDSU students and faculty, as well as the industry across the state and across the world.

Wide Range of Support

Pellman was one of North Dakota Wheat Commission (NDWC) board members attending the Peltier Complex dedication. The complex is named for the Peltier family, longtime supporters of research and extension in agriculture. The family provided a naming rights gift to support private fundraising for the project. In addition to the Peltier family, gift commitments for the project come from commodity groups, including the NDWC and the NCI. Alumni, businesses, and friends of NDSU were also part of NDSU’s $455 million In Our Hands fundraising campaign.

The Bolley Agriculture Laboratory’s namesake, Henry L. Bolley, was one of the first faculty members at North Dakota Agricultural College, now NDSU.

“Like Bolley, our scientists who will occupy this building will deliver research results that make a difference to those involved in agriculture in North Dakota,” said Lardy. “They will develop better crop varieties for our unique climatic conditions, new solutions to challenging plant diseases, and better soil fertility and soil health management practices to improve the economic and biological sustainability of our agricultural production systems.”

June 25, 2024/by Ralph Loos

Sustainability, Wheat Production and Harvest

Where Can I Learn More About Sustainable Wheat Production?

Here in the United States, the topic of sustainable agriculture is getting a lot of attention. U.S. Wheat Associates (USW) believes people everywhere want to know where their food comes from and how it is produced. The following facts and resources will help the world’s wheat buyers learn more about sustainable wheat production in the United States.

Stories of Stewardship

USW in 2024 has shared some of the impressive stories of stewardship in wheat production taking place across the country. In a new effort we call “Stories of Stewardship,” USW gathers resources the world’s wheat buyers, flour millers, bakers, and wheat food processors need to better understand how U.S. farmers produce more and better-quality wheat while using methods that are better for the planet we all share. This includes a video series that feature 5 farmers who tell their own stories of how they are managing their crop and land for our future.

U.S. Sustainability Alliance

To help tell the story of sustainable wheat production to the world, USW is a member of the U.S. Sustainability Alliance. That is a group of American farmers, fishery managers and foresters who want to tell the world “how we grow.” The group offers many resources for learning more about responsible food production, including a series of articles about how individual farmers approach sustainable production, including one about Jennie Schmidt, a Maryland farmer who recently traveled to Asia with USW.

A beneficial fact sheet titled “U.S. Wheat – A Global Leader in Sustainability” is also available from U.S. Sustainability Alliance and on the USW website.

Field to Market

Field to Market is an alliance of diverse member organizations formed to help “unite the supply chain to deliver sustainable outcomes for agriculture.” In December 2021, the National Association of Wheat Growers (NAWG) shared about sustainable wheat production from Field to Market’s latest “National Indicators Report.” That report provides an assessment of “where U.S. agriculture has made progress in driving improved environmental outcomes.”

NAWG noted the report shows wheat production saw improvement in its sustainability efforts in almost every category of land use, soil conservation, water and energy use. Review the Wheat section of the Field to Market report online here and the entire report here.

Farm Bureau

The American Farm Bureau Federation (AFBF) is a nationwide advocacy organization for U.S. farmers, including many wheat farmers and livestock producers. The organization has an interesting resource on “Sustainability in Agriculture.” AFBF co-founded the Food and Agriculture Climate Alliance and, to showcase the progress U.S. producers have made in achieving sustainability goals, also co-founded Farmers for a Sustainable Future.

AFBF’s President Zippy Duvall in 2022 wrote an important column pointing out some key facts about U.S. agriculture that may not be well-known. For example, he noted that “American agriculture makes up just 10% of greenhouse gas emissions, much lower than transportation, electricity generation and industry.” In addition, he said more than half the U.S. wheat corn, cotton and soybeans were planted using no-till or low-till methods.

USDA

The U.S. Department of Agriculture has important programs that benefit U.S. farmers and the environment. One example is the Conservation Reserve Program, which has a direct, positive impact on carbon sequestration. There are 140 million acres (56.7 million hectares) of privately owned land reserved from cultivation. In other words, that amount of land is more than the states of New York and California combined.

On September 2022, Secretary Vilsack announced USDA would be investing up to $2.8 billion in 70 selected projects under the first pool of the Partnerships for Climate-Smart Commodities funding opportunity. On December 12, 2022, he announced $325 million would be invested in an additional 71 projects under the second funding pool. “Partnerships for Climate-Smart Commodities” supports farmers, ranchers, and forest landowners create market opportunities for U.S. agricultural and forestry products that use climate-smart practices. Some of these practices include cost-effective ways to measure and verify greenhouse gas benefits. Read more about this initiative here.

June 24, 2024/by Steve Mercer

Korea, Wheat Foods

VIDEO: U.S. Wheat Supply Chain Put in Focus for Korean Bakery Product Development Team

U.S. Wheat Associates (USW) Bakery Technologist David Oh recently led a team of managers from South Korea through a Bakery Product Development Course at the Wheat Marketing Center in Portland, Oregon. The week-long educational seminar focused on six products made with classes of U.S. wheat, allowing the team to see how the quality of U.S. wheat helps bakers create better end products.

The team also visited the Thomas Dierickx farm to meet U.S. wheat farmers and learn about their production practices, and toured the Marsee commercial bakery and a Fred Meyer market in Portland.

Hear USW’s Luke Muller talk about the team’s visit and see scenes from each stop in this short video . . .

June 21, 2024/by Ralph Loos

Wheat Industry News

News and Information from Around the World Wheat Industry

Speaking of Wheat

“As most of you know, I am retiring May 31, 2024. As I prepare to embark on a new journey, I wanted to take a moment to express my heartfelt gratitude to each and every one of you. It was wonderful working within the USW family, as I grew up with this family, and it has been an incredible experience that I will always cherish. I am truly grateful for the support and friendship that I have received … during my almost 39 years of service. The memories will always hold a special place in my heart. I am so blessed to have you all in my life for so many years.”

– Ms. Mina El Hachimi, Senior Administrative Consultant, U.S. Wheat Associates (USW) Casablanca. Happy retirement, Mina!

K-State Welcomes Next Grain Science Department Head

Kansas State University College of Agriculture has announced that Joseph Awika (photo, right) has accepted the position of department head of grain science and industry, and director of the IGP Institute, a USW educational partner. Awika joins K-State from Texas A&M University, where he has been food science and technology department head. He earned his undergraduate degree at Egerton University, Kenya, and a doctoral degree in food science and technology from Texas A&M. Read more here.

Canadian Gene-Edited Wheat Research

Agriculture Canada has announced it is testing gene-edited wheat in a greenhouse at its Lethbridge (Alberta) Research and Development Centre. The goal is to produce spring wheat lines with greater ability to receive and use sunlight, according to an Alberta Farmer Express article. Gunter Jochum, president of the Western Canadian Wheat Growers Association is pleased with the development. “I think it’s fantastic. It’s good for our industry and it is exactly what’s needed going forward,” Jochum said.

New Ardent Mills CEO

The board of directors of U.S.-based Ardent Mills has appointed Ms. Sheryl Wallace as CEO effective July 8. Wallace most recently served as president, U.S. origination and grain, at Cargill and has been an Ardent Mills director since 2020. This leadership transition comes as Ardent Mills’ current CEO, Dan Dye, announced his retirement earlier this month, following a decade of service in his role. Read more here.

Planned Precision Ag Research Center Focused on Sustainability

Ground was broken recently for a $160-million state-of-the-art precision ag research center, a partnership between the USDA, the University of Nebraska-Lincoln, and Nebraska Innovation Campus (photo at top of this page). It will bring together multidisciplinary experts to research and develop new technologies to address some of agriculture’s biggest challenges with a focus on promoting sustainable, resilient, and highly efficient agriculture practices. The Nebraska Wheat Board is a member of U.S. Wheat Associates. Read more about the new research center. Read more about precision agriculture in wheat production here.

New U.S. Wheat Crop Sales

Joel Karlin, DTN Contributing Analyst, shared the chart below showing old and new U.S. wheat crop export sales as a percentage of USDA’s estimates. Karlin said starting with new crop, current sales for the 2024/25 marketing year beginning June 1 are 120 million bushels (3.27 million metric tons), which is 15.5% of the first USDA wheat export projection for the new marketing year. That is the second highest percent since the 2016/17 season. Read more here, and follow current and new crop U.S. wheat commercial sales here.

Subscribe to USW Reports

USW publishes various reports and content available to subscribe to, including a bi-weekly newsletter highlighting recent Wheat Letter blog posts and wheat industry news, the weekly Price Report, and the weekly Harvest Report (available May to October). Subscribe here.

Follow USW Online

Visit our Facebook page for the latest updates, photos, and discussions of what is going on in the world of wheat. Also, find breaking news on Twitter, video stories on Vimeo and YouTube, and more on LinkedIn.

May 30, 2024/by Steve Mercer

China, Wheat Foods

VIDEO: New Ideas for Wheat Foods Shared During China End Product Collaborative Workshop

U.S. Wheat Associates (USW) China Country Director Shirley Lu and Technical Specialist Ting Liu recently led a team of managers and buyers from China Oil and Foodstuffs Corporation (COFCO) on a visit to the Pacific Northwest to explore new wheat food products. The USW China End Product Collaborative toured Loren Berhman’s wheat farm in Cornelius, Oregon, and retail bakeries in the Portland area. The team also participated in a workshop hosted by the Wheat Marketing Center. The workshop offered opportunities for team members to make and evaluate end products such as muffins, biscuits, bagels, bread, sponge cake, and pancakes using different classes of U.S. wheat.

“They were here really to identify new products and new ways to use U.S. wheat,” USW Vice President and West Coast Office Director Steve Wirsching said. “The great thing is that we were able to share with the team a lot of different new ideas for products, and also provide them some good information on all classes of U.S. wheat. At the same time, we were able to learn a lot about their needs and what they are looking for when it comes to buying wheat.”

See scenes from the visit and learn more about the USW-sponsored team in this short video.

May 29, 2024/by Ralph Loos

Hard Red Spring, Supply and Demand, Wheat Foods, Wheat Quality

USW Work in Bangladesh Designed to Develop Market for HRS and Other Wheat Classes

U.S. Wheat Associates (USW) is continuing an effort to build demand for U.S. wheat in Bangladesh, where flour mills have recently expressed interest in importing more wheat with stronger gluten for a variety of end products enjoyed by the country’s 171 million consumers.

This month, USW Assistant Regional Director Joe Bippert and Dr. Shahidul Islam, Wheat Quality Specialist at North Dakota State University (NDSU), travelled to the South Asian country to meet with millers and wheat food manufacturers.

USW Assistant Regional Director Joe Bippert and Dr. Shaheed Islam, Wheat Quality Specialist at North Dakota State University (NDSU), visited some of the largest flour mills in Bangladesh.

USW Assistant Regional Director Joe Bippert and Dr. Shahidul Islam, Wheat Quality Specialist at North Dakota State University (NDSU), visited some of the largest flour mills in Bangladesh.

Seeking Stronger Wheat

“Bangladesh has relied primarily on Canada to source higher protein wheat, but recent pricing opportunities allowed U.S. hard red spring (HRS) to enter the market showing mills the value of superior performance associated with a spring wheat with stronger gluten,” Bippert said. “We saw an opportunity to introduce Dr. Islam, an HRS wheat expert who is Bangladeshi and can speak the local language. We toured mills and met with millers, explaining the unique characteristics of HRS wheat and exploring opportunities to become a more consistent wheat supplier, even in a competitive price market.”

Dr. Shahidul Islam and Joe Bippert gain insight into Bangladeshi flour milling in May 2024.

Bippert (right) and Islam (left) had discussions with millers about the quality and value of U.S. wheat, along with the availability of six different U.S. wheat classes.

A small volume of U.S. HRS wheat has moved to Bangladesh so far this marketing year. Bippert and Dr. Islam’s visit was the latest attempt to grow the market.

In September 2023, USW Regional Vice President for South and Southeast Asia Joe Sowers participated in the Bangladesh Wheat Foods Summit, an event organized by USDA’s Foreign Agricultural Service (FAS). An FAS initiative to conduct a market assessment of the Bangladeshi wheat food end-products industry inspired the summit.

Sowers was invited to present on USW’s work, the six U.S. wheat classes, and the benefits of U.S. wheat as an ingredient in Bangladeshi wheat foods.

Gaining Insight

Bippert’s recent visit provide insight into the assortment of products coming out of bakeries in Bangladesh, and how U.S. wheat could fit as a primary ingredient. A meeting with the nation’s largest cookie and cracker manufacturer included discussions about how U.S. soft white and soft red winter wheat could not only lead to improved product quality, but also create value due to U.S. wheat’s lower moisture content than what comes with supplies from the Black Sea region.

“It’s been a tough market that has been up and down, but we are very excited about Bangladesh and its potential,” Bippert said. “The country is a significant world wheat importer. And we believe that bringing in world class technical experts like Dr. Islam will help us develop the market and increase sales.”

May 29, 2024/by Steve Mercer

Educational Partnerships, Flour Milling, Kansas State University (KSU), Kansas Wheat, Plant Breeding Innovation, Technical Service Activities

K-State Breaks Ground on Global Center for Grain and Food Innovation

Kansas State University has launched a project that will bring together two of its strongest agricultural programs under one roof.

The university held a groundbreaking ceremony on May 17 for the Global Center for Grain and Food Innovation, to be located just off the corner of Claflin Road and Mid-Campus Drive. The new building is estimated for completion in Fall, 2026.

It will also bring faculty and staff from the departments of animal science, food science, and grain science together, allowing them to work side-by-side on more projects.

Enhancing Milling and Bakery Science Education

K-State’s Department of Grain Science and Industry offers the country’s only undergraduate degrees in milling science, bakery science and feed and pet food processing – and in fact, is one of only a few in the entire world to do so. The department reports a 100% job placement rate in those degree programs.

Hulya Dogan, interim department head for grain science, said the Global Center for Grain and Food Innovation will be the new home for her department’s faculty and staff, replacing the aging Shellenberger Hall. On May 20, K-State announced that Dr. Joseph Awika has accepted the position of Grain Science and Industry department head.

For students, Dogan said, the new building will contain “the latest technologies so that they are able to enter the workforce immediately after graduation.”

Sharing space on the K-State campus not far from where the new Center will be located is the Kansas Wheat Innovation Center, built by the Kansas Wheat Commission, through the Kansas wheat checkoff, to get improved wheat varieties into the hands of farmers faster. It represents the single largest research investment by Kansas wheat farmers in history. IGP Institute and the Hall Ross Flour Mill are also part of the K-State training and teaching services, familiar to many overseas U.S. wheat buyers through U.S. Wheat Associates (USW) export market development activities.

Ambitious Plan

Ernie Minton, the Eldon Gideon Dean of K-State’s College of Agriculture, said the center is the third groundbreaking in the university’s Agriculture Innovation Initiative, a multi-year push to upgrade and expand facilities in grain, food, animal and agronomy research. When completed, the Agriculture Innovation Initiative is anticipated to top $210 million raised from a combination of state, private and university funds.

The Global Center for Grain and Food Innovation “is part of an ambitious plan to make Kansas State University the Next-Generation Land Grant University,” Minton said. “We want to be the example of what a land grant university should be in the 21st century.”

Ernie Minton, the Eldon Gideon Dean of K-State’s College of Agriculture, provides remarks during the groundbreaking ceremony for the Global Center for Grain and Food Innovation, May 17 in Manhattan, Kansas.

K-State President Richard Linton called May 17 “a big day for the College of Agriculture, a historic day for K-State, and a transformational day for Kansas agriculture and our agriculture and food industry stakeholders.”

“Get ready,” he said. “Things are going to look and feel different at Kansas State University. Our agriculture impact locally and globally will reach new heights because of this project.”

Linton pointed to the entirety of the Agriculture Innovation Initiative, which will create four new buildings and three remodeled spaces.

“These facilities will support cutting-edge research and learning,” Linton said. “We will have interdisciplinary lab spaces and areas dedicated to helping foster partnerships with industry. Students can expect larger, more accessible classrooms outfitted with the latest technologies and suitable for remote learning. There will also be unique learning spaces, like the arena pavilion, a pilot plant and a test kitchen.”

Learn more about K-State’s Agriculture Innovation Initiative at www.k-state.edu/ag-innovation.

May 28, 2024/by Steve Mercer

Market and Crop Analysis, Tyllor Ledford

Initial 2024/25 Estimates Add to Bullish Market Sentiment

Topping off a volatile, weather driven week, the May World Agricultural Supply and Demand Estimates (WASDE), released on May 10, 2024, forecast a tighter global wheat balance sheet and decreased production in several major wheat exporting countries. Moreover, USDA foresees factors that contribute to bullish market sentiment. It expects both world production and consumption to reach record levels in 2024/25, with consumption outpacing production for the sixth time in the past seven years.

The recent updates supported an already bullish market sentiment. From April 18 to May 10, Chicago Board of Trade wheat futures jumped from $5.53/bu to $6.63/bu on the day of the report’s release, and on May 28 July CBOT futures were up over $7.00/bu. The following highlights key factors to watch from the initial 2024/25 estimates and outlines the potential implications for the new crop.

This bar and line chart shows USDA data relationships between world wheat production and use from 15/16 to 24/25.

USDA expects that both global production and consumption will hit record highs in 2024/25 at 798.2 MMT and 802.4 MMT, respectively. Consumption also outpaces production for the sixth time in the past seven years. Source: May WASDE.

Mixed Outlook in Major Exporters

The outlook for production levels in major exporting countries is variable for 2024/25. The May WASDE projects an increase in total wheat production; however, production in major exporting countries stays relatively steady, declining by just 200,000 MT to 321.0 MMT.

Following reports of dryness and potential frost damage in Russia, USDA decreased Russian production to 88.0 MMT, the lowest level since 2021. Similar weather-related issues led to a 2.0 MMT decrease in Ukrainian wheat production to 21.0 MMT. USDA also lowered EU production estimates by 2.2 MMT year-over-year to 132.0 MMT as heavy rains and flooding degrade crop conditions, particularly in major exporter France, contributing to bullish market factors.

Nevertheless, increased production in the United States, Canada, and Australia offset the reductions. U.S. wheat production estimates sit at 50.6 MMT, up 1.3 MMT from last year, but 1.1 MMT below the USDA Outlook Forum estimates. Canadian production increased 2.1 MMT to 34.0 MMT on normalized weather, while Australian production rose 3.0 MMT to 29.0 MMT in anticipation of an upcoming La Niña weather event.

Notably, India and China registered the largest production increases, at 3.5 MMT and 3.4 MMT, respectively; however, their output does not influence exportable supplies.

This bar chart shows USDA's data on wheat supplies in 7 major exporting countries from 15/16 to 24/25.

Production in major exporting countries is projected to remain relatively steady, declining by just 200,000 MT to 321.0 MMT. Source: May WASDE.

Tighter Stocks in 2024/25

The initial outlook for the 2024/25 balance sheet points to a bullish market trend. Global wheat consumption may exceed production by as much as 4.2 MMT, further tightening stock levels. As a result, 2024/25 ending stock level estimates decrease to 253.6 MMT, a 4.2 MMT reduction from the year prior, and the lowest level since 2015/16. Major exporter ending stocks are forecast 8% lower at 52.6 MMT, while the global stocks-to-use ratio, excluding China, is expected to tighten to 18%, down 1 point from the year prior and the lowest since 2007/08.

Global wheat consumption may exceed production, further tightening stock levels. As a result, 2024/25 ending stock level estimates decrease to the lowest level since 2015/16. Likewise, the global stocks-to-use ratio, excluding China, is expected to tighten to its lowest since 2007/08. Source: May WASDE.

Stay Tuned for Updates

Looking ahead to marketing year 2024/25 and beyond, the weather and global production outlook will ultimately dictate wheat availability and quality, while a continued decline in world-ending stocks may have a bullish market influence on future price trends.

However, in the short term, prices will stay volatile in response to rapidly changing conditions and news. As always, it is important to remember that the May estimates are the initial projections for 2024/25 and are subject to change as more information becomes available. In July, USDA will release the first estimates for U.S. wheat production and exports by class, in addition to more detailed global production information. As the Northern Hemisphere harvest continues, U.S. Wheat Associates (USW) remains dedicated to providing dependable and up-to-date information for buyers, millers, and end users alike.

By USW Market Analyst Tyllor Ledford.

May 28, 2024/by Steve Mercer

Wheat Industry News

News and Information from Around the World Wheat Industry