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Wheat news from around the world - 2014, Week 22

Wheat trade
Decline of HRW (Gulf)* wheat continued its steady decline and closed on Friday May 30 at US$ 317/t.
France Grade 1 (Rouen)** declined slightly early in the week and then remained almost constant around US$ 265/t.

The longest run of declines since September 1998 continue as traders factor in the prospect of cooler, wetter weather in coming months that will help crops across whole north hemisphere.
Weak demand for U.S. soft red winter wheat and ample global supplies have pressured the front Chicago Board of Trade wheat futures contract to a point where the exchange might need to raise storage rates for the first time in three years.
Read more: storage rates (1)
According to the International Grains Council, world wheat production will be smaller than estimated last month as dry weather erodes prospects for the harvest in the U.S. Global wheat output will be 694 million metric tons in the 2014-15 season, less than an April forecast of 697 million tons and 2.1 percent smaller than the previous year. Production in the U.S., the world’s biggest exporter, will be 55 million tons, compared with a previous forecast of 59 million tons. 
Wheat harvest:
  • is finished in Indo-Gangetic plains - India, Pakistan, Nepal and Bangladesh.
  • is finished also in north-west Mexico (Sonora).
  • going on in North Africa and Near East where spring wheat is grown during the winter.
  • winter wheat harvest started in Iran.
  • started in some provinces of China (Jiangsu, Guizhou, Sichuan).
Wheat crop is  in full growth in temperate zone of northern hemisphere - US, Europe, Russia and China.
Wheat planting is almost done in central Mexico, South Africa and Zimbabwe.
Wheat planting is starting in Australia and Southern America - Argentina, Paraguay, Uruguay.
Egypt:  A wheat harvesting and rural tourism festival designed to increase the production of wheat and rural products in general is now under way in Alexandria. 
Read more: Egypt (1)
Morocco’s government has lowered its cereal production estimate and we estimate Moroccan wheat production at 5m tonnes (including 1.3m tonnes of durum), 700,000t less than previously.
Read more: Morocco (1)
IndiaDespite weather vagaries and aggressive buying of wheat by private traders this season, procurement by the Food Corporation of India (FCI) has touched 26.67 million tonnes (as on Friday May 24), as compared to 25.42 mt during the same period last year.
  • Procurement ended in Punjab and Haryana on Saturday May 24 and both states have achieved their estimated targets of 11 million t and 6.5 million t, respectively. 
  • Madhya Pradesh was expected to procure 8 million t as compared to 6.5 million t last year; FCI sources say it might be 7 million t, the figure being 6.8 million t till Friday May 23. 
  • Uttar Pradesh was expected to contribute 3 million t to the central pool but has procured only 0.3 million t.
Read more: India (1)India (2)
PakistanThe Pakistan Agriculture Storage and Services Corporation (Passco), a state-run grain buying agency, is falling short of the purchase target of 1.6 million tons of wheat in three provinces – Punjab, Sindh and Balochistan – this season, officials say. On the other side Sindh Food Department (SFD) procured 30 %more wheat compared to last year, ahead of the cutout date which is June 15. 
North America
US/California: Researchers at UC Davis are working to stem a decline in California wheat production by developing varieties that are more drought tolerant, resistant to diseases and more nutritious.
US:Kansas: The Kansas wheat harvest is expected to start in about 10 days, and most farmers expect a fairly miserable crop. In its May 1 forecast, the USDA forecast 260 million bushels, the smallest harvest since 1996, with an average yield of 31 bushels per acres. Since then, the sun has beamed down, winds have blown hard, temperatures have been in the 90 a few times – and not enough rain has fallen, particularly in western Kansas, to make up any deficits.
Read more: USA-Kansas (1)
US/Ohio: The wheat crop is going to be harvested later than normal in almost all areas of Ohio this year due to the cooler than normal spring temperatures. This leaves farmers with some tough choices once the wheat acres are harvested. 
Read more: USA-Ohio (1)
US/Oklahoma: Recent rains are expected to have little impact on the local wheat and canola harvest. Rainfall totals in southwest Oklahoma are more than 3 inches below normal. 
US/Texas: Wheat harvest began in drought-hit central Texas this past week and, as expected, the yields are low and the protein is high.
Read more: USA-Texas (1)
Mexico/Sonora: With only about week till the end of 2014 harvest, the average yield seems to be lower than expected - 5.54 t/ha. According to Sagarpa official the main reasons of lower yield are warm weather during grain filling and lodging after strong winds that occurred towards the end of March. 
Read more: Mexico (1)
South America
ArgentinaDue to very high soil moisture in several key wheat regions, the start of wheat planting has been delayed for a week or so, but have finally started.
Bolivia: Heavy rains in the growing areas of Santa Cruz have delayed the wheat planting. Fifty percent of Bolivia's foreseen 120,000 ha of wheat were supposed to be planted by Friday May 30, however the planting has hardly started.   
Read more: Bolivia (1)
AustraliaAustralia will finish sowing at the end of June. Various weather models predict a 50% chance of an El Niño effect from then, which would increase the probability of a dry spring, adding to production concerns.
Russia & UkraineCrops in Ukraine and Russia are good, but conditions dry. Both are major exporters and if the situation in Ukraine deteriorates internal transportation, loading in the ports and/or navigation on the Black Sea may be affected, providing short-term support for the market. 
In Denmark and Sweden 100,000ha more has been planted, which will increase production by 900,000t and 600,000t respectively, while in Spain, which had 150% of normal precipitation in March, production is up by 200,000t to 6.1m tonnes. Dry weather in France and Germany is a risk, but wheat is in good condition.
Read more: Europe (1)
*(US Wheat, Hard Red Winter, Fob US Gulf ports)
**(EU - France Grade 1 Rouen) 

Wheat news from around the world - 2014, Week 20

Wheat trade
HRW (Gulf)* was steadily declining whole week and closed in Friday (5/16/2014) at US$ 334/t (week loss of more then U$ 20/ton).
France Grade 1 (Rouen)** was also declining whole week although much less dramatically and closed on US$ 276/t on Friday May16, 2014.

Why that sharp decline in price?
First on speculation that beneficial crop weather in North America will bolster supplies. However the rains may have come too late to Great Plains to change significantly overall bad shape of the winter wheat. USDA projects U.S. wheat supplies for 2014-15 will fall 10% below 2013-14 levels. But the wheat crop in most of other countries looks very well so far - bumper harvest in India, good weather and crop progress in Europe and inverntories in Canada will double to a two-decade high after output surged 38 % in 2013. However, the situation in Ukraine, important wheat exporter remains unresolved.
References/Read more - wheat trade (1); wheat trade (2); wheat trade (3); wheat trade (4)
Wheat harvest is in its peak in Indo-Gangetic plains - India, Pakistan, Nepal and Bangladesh (finished).
Harvest in north-west Mexico (Sonora) is in full swing.
Harvest is also going on in North Africa and Near East where spring wheat is grown during the winter.
Crop is  in full growth in temperate zone of northern hemisphere - US, Europe, Russia and China.
Wheat sowing will be soon starting in Southern America - Argentina, Paraguay, Uruguay.
India: Although wheat is grown primarily under irrigation in India, country production depends heavily on weather pattern, particularly the temperatures towards the end of cropping season. In some years India can afford to export few million tons, in other years needs to import. Big problem is storage - almost every year thousands of tons rotten in poo-standard open-air storage places.
According to the recent study conducted by the Associated Chambers of Commerce and Industry of India (Assocham), India can record 10 million tonnes (mt) of annual wheat export through sustained annual production of about 95 mt and continuous reduction in post-harvest crop losses due to inadequate storage capacity.
In 2014 the harvest started late and slow due to unseasonal rains. However during last week the procurement quickly picked up and reached the levels of 2013 in both Punjab and Haryana. All seems to indivate that 2014 is another bumper wheat harvest year.
References/Read more - India (1); India (2); India (3); India (4); India (5)

Pakistan: The government has so far procured about 4.1374 million tons of wheat through its wheat procurement campaign for the year 2014-15 across the crop sowing areas in the country, which is only about 1/2 of the plan to fulfill the domestic requirements as well as keep the strategic food reserves.
References/Read more - Pakistan (1)
Egypt: The world's biggest wheat importer wants to boost domestic production in an effort to cut its import bill. Government considers raising price of wheat to encourage farmers to step up production - Price increase would aim to encourage local farms selling more wheat to the state in order to make Egypt, the world’s largest wheat importer, less relient on imports. Each year the state and private buyers purchase around 10 million tonnes from abroad. Egypt estimates its total local wheat crop this year at around 9 million tonnes, of which the government is aiming to buy 4 million. So far procurement reached about 2.5 million tonnes of local wheat, more than half its target. Procurement season that lasts until mid-July.
Despite the earlier announcement that Egypt would not start importing wheat this year until July, The General Authority for Supply Commodities (GASC) has contracted to purchase 60,000 tons of wheat from Ukraine. The wheat will be imported starting on 20 June over a period of 10 days.
References/Read more - Egypt (1); Egypt (2); Egypt (3)
Strategie Grains underlined ideas of Europe performing strongly in wheat exports next season, but said that the prospect for prices was "rather bearish" nonetheless, undermined by the competitiveness of corn for animal feed. The influential analysis group lifted its forecast for European Union soft wheat exports in 2014-15 by 1.4m tonnes to 24.3m tonnes - a figure it has now raised by nearly 4m tonnes in four months, and which would be a record high were it not for the strong performance this season.
References/Read more - Europe (1)

Spain: Yellow rust put on alert wheat farmers of the province Castilla and Leon. The ITACYL (Agricultural Technology Institute) reports that a race of this fungus, probably transmitted from Denmark and the UK, has surprised the rainfed production and could be very serious if not not treated on time with fungicides.
References/Read more - Spain (1)
Australia: Fungicide-resistant Septoria tritici blotch (STB) has been identified in a number of Australian wheat crops by researchers. STB is caused by a fungus, Zymoseptoria tritici (synonym Mycosphaerella graminicola, Septoria tritici), which survives in wheat stubble. While STB is a serious disease of wheat found in all the major wheat growing regions of the world, the prevalence of the disease in Australia had been low due to prolonged periods of drought.
References/Read more - Australia (1)
North America
US: Much expected rains in Great Plains came maybe to late to help significantly poor wheat crop in Kansas or south-west Oklahoma where production is expected to drop up to 50% compared to last year. Virginia agriculture officials say this year's winter wheat crop is expected to be smaller than last year's crop and predict about 9% drop. On the other hand, Nebraska’s winter wheat crop is coming along much better, as well as North Dakota where the ag. department pegs this year’s crop at 33.1 million bushels, more than double last year’s crop.
References/Read more - US (1) - Kansas; US (2) - Nebraska; US (3) - Oklahoma; US (4) - North Dakota; US (5) - Virginia

Mexico: Wheat harvest in the important wheat producing regions of north-west Mexico is almost over, but wheat is grown also in other parts of the country - one of such places is Valle de Zamora in Michoacan - despite adverse weather conditions and early advanced, the wheat crop in this agricultural cycle exceeds 20 thousand tons. The harvest is expected to conclude in late May or early June, depending on the rainy season.
Harvest in north-west Mexico (Sonora) is in full swing. Wheat producers in this region asked the three levels of government for support of one thousand dollars per hectare, to avoid burning the residues, to prevent the air pollution. Farmers claim not to be able to absorb the costs of equipment needed to incorporate plant residues to the soil. However in case they would apply principles of conservation agriculture, the crop residues shall be maintained on the soil surface ... extension system in Sonora still have the work to do.
References/Read more - Mexico (1); Mexico (2)

South America
: Wheat planting begun and the 2014-2015 area is expected to increase by 18.8 % compared to the previous cycle, according to estimates by the Grain Exchange Buenos Aires. However that is still much lower compared to the peak wheat planting in 2007 when the area reached almost 7 million hectares.
References/Read more - Argentina (1), Argentina (2)

Bolivia: At least 114,000 farm-holds produce wheat in Bolivia. But there is a deficit of 60 percent, according to a report submitted by the Bolivian Institute of Foreign Trade (IBCE). Bolivia implemented program to increase wheat production in coming years.
References/Read more - Bolivia (1), Bolivia (2)

Venezuela: The situation in baking and pasta producing industries is serious - inventories were depleted and the shortage of in-country produced pasta is notorious. The lack of wheat flour forced Venezuelan baking industry and pasta-production to decrease, and in some cases to stop the production.
References/Read more - Venezuela (1)

Wheat news from around the world - 2014, Week 19

Wheat trade 
HRW (Gulf)* reached its 13 months maximum on Tuesday May 6 (US$ 366/t) then started to decline and closed on Friday (5/09/2014) at US$ 357/t.
France Grade 1 (Rouen)** touched level of US$ 297/t on Tuesday May 6 2014, but then dropped to US$ 287/t and remained stable for the rest of the week.

Wheat prices began to firm in late January when the Ukrainian/Russian crisis started to look serious. Unlike many such rallies that are spurred by geopolitical crisis, this one did not fade away after a few days or weeks. Normally, the headlines create panic and traders react spontaneously, but after assessing the facts, prices retreat. This time, however, situation is more serious:
  • Most Ukrainian grain exports are shipped abroad from Black Sea ports on Crimean shores – now effectively controlled by Russia. There are still 2.5 million tonnes of last year crop wheat commitments remaining to be shipped. Exports from the upcoming crop, which will be harvested this summer, also remain vulnerable to the viability of Black Sea ports. European wheat futures, however, fell on Wednesday after comments by Russia's president suggested a possible easing in tensions with Ukraine and as the U.S. wheat market dropped after a weather-fueled rally this week.
  • Second reason of the wheat price spike is continuing dry conditions for the large wheat production areas in the US. US farmers probably will harvest the smallest winter-wheat crop since 2006 after freezes damaged yields and drought conditions persisted for the fourth straight year in the Great Plains, according to a survey of 20 analysts and traders by Bloomberg News.
Wheat fell to the lower level towards the end of the week, after the USDA said global reserves will climb even as dry weather cuts production in the U.S.. The US is the biggest wheat exporter, while Russia and Ukraine are expected to rank fifth and sixth in the 2013-14 season, according to the International Grains Council.
WASDE: Global 2014/15 wheat supplies are projected down less than 1 percent from 2013/14 as reduced beginning stocks and production in the United States offset higher foreign beginning stocks. World wheat production is projected at 697.0 million tons, down 2.4% from the 2013/14 record. Foreign production is projected 12.4 million tons lower in 2014/15 with increases for Argentina, the European Union, China, Brazil, Kazakhstan, Mexico, and India more than offset by reductions for Canada, Turkey, Morocco, Ukraine, Australia, Iran, and Syria. Lower area and a return to trend yields also reduce production in Canada from last year’s record high. In the Middle East, persistent dryness and early April freezes have severely damaged winter wheat crops from Turkey to northeastern Iran. For Ukraine, lower reported area and a return to trend yields reduce expected output.
References/Read more - USDA report (1) 

World wheat inventories will rise 0.5 percent to 187.42 million tons in the marketing year that begins June 1 from 186.53 million this year, the USDA said. World trade is forecast to fall 6.3 percent to 151.8 million, the agency said. 
References/Read more - USDA report (2)
Bangladesh: Bumper wheat yield fails to make farmers happy as the prices are too low to bring any profit. The prices show a downward trend but farmers have to sell their produce for low prices to repay the loan they took with a high interest rate for the cultivation. Meanwhile, the government's wheat procurement programme that started on April 1 to support the farmers has virtually failed to serve the purpose as the growers have to sell the produce for much lower than the government rate.
References/Read more - Bangladesh

India:  ITC, Cargill and other private companies increase wheat procurement
Arrivals and procurement trend also indicate that the size of the crop could be better than last year. Also, damages to the crop on account of multiple spells of unseasonal rains over the past few months could be lower than what has been feared. According to the second advanced estimates, wheat production is expected to touch a record 95.6 mt this year.
Private companies and multinational traders from ITC, Cargill, Noble, Louis Dreyfus, Glencore, Midstar, Concordia, Bagadiya Brothers and Emmsons are giving a tough competition to Food Corporation of India (FCI) in the procurement of wheat. Apart from procuring the grain for export from Rajasthan, Gujarat and Madhya Pradesh, the private sector has also entered Uttar Pradesh, Punjab and Haryana market this year.
The Government had set a procurement target for wheat this year to 38.1 mt, which was later scaled down to 31 mt (last year, wheat procurement stood at 25.04 mt). Despite a month-long delayed start to wheat harvest, progressive procurement of the cereal by Government agencies has picked up in the last few days. FCI has also extended the deadline for procurement from April 30 to May 15. However many believe that FCI is likely to miss its wheat procurement target of 31 million tonnes (mt) by about 15 per cent and end up with about 25 mt, a six-year low.
Also, this year saw significant hoarding by farmers. Expecting a surge in prices and anticipating an impact of the El Niño weather phenomenon on agricultural commodities in the coming months, they have diverted substantial quantities of wheat to private granaries.
References/Read more: India (1), India (2), India (3), India (4), India (5)
Lachstock Consulting predicts decline in Australia’s wheat crop to 23.7 million tonnes. The decrease is mainly due to Western Australia’s crop achieving average yields ­rather than the record yields reached last season. But with new crop prices at high levels, it forecasts about a 5 per cent increase in wheat plantings to 13,894,000ha on last season figures.
References/Read more - Australia
Romania might report an annual wheat crop of 6.7-6.9 mmt this year, local grain trader XTB Romania reported based on data supplied by Coceral. Export potential would consequently be around 3.3 mmt. Romania exported 3 mmt of wheat in H2 last year alone. 
References/Read more - Romania

UK - The UK could return to becoming a net exporter of wheat in the coming year. This was the claim from HGCA. The body said, subject to good yields and quality, the 2014 crop would be the first since the 2011/12 marketing season in which more wheat was exported than imported. But a greater amount of wheat is likely to mean a deterioration of prices over the next few months as UK grain would need to be priced competitively for export markets.
Reference/Read more - UK
North America
US wheat supplies for 2014/15 are projected down 10% from 2013/14 with beginning stocks, production, and imports all expected lower. Supplies for the new marketing year are projected to be the lowest since 2007/08. The survey-based forecast for 2014/15 all winter wheat production is down 9 percent on the year with the harvested-to-planted ratio just above last year’s 11-year low and the yield forecast at its lowest level since 2007/08. Most of the decline year to year in winter wheat reflects lower area and yields for Soft Red Winter wheat.
References/Read more - US (1)

US - Kansas: the 57th annual Wheat Quality Council evaluation tour estimate is lowest in 18 years. The estimate, made by 55 participants who were part of a pool of 74 total scouts, is the lowest estimate since 1996. The tour made 587 field stops this year, compared with 570 a year ago. The calculated average for those 587 stops was 33.2 bushels per acre, compared to 41.1 bushels on the same routes in 2013.
References/Read more - US - Kansas

US - Oklahoma: Drought devastates Oklahoma’s wheat crop. The Oklahoma Wheat Commission says this year’s crop will go down in history as one of the worst in decades. The crop is down 38% from the previous five-year average.
References/Read more - US - Oklahoma 

US: The wheat stem sawfly, one of the major pests of wheat, has been on the move – and not eastward as many might think. Scientists and producers in Nebraska and Colorado are reporting the wheat stem sawfly has been moving into fields and affecting yields in their states. While they were aware the sawfly had been spotted there, the fact that it was becoming a major pest was a surprise. Colorado Extension agents reported the sawfly was starting to spread in 2010, and Nebraska Extension reports the sawfly started to spread in their state in 2012. While grasses in those states were already infested, the winter wheat fields had been left relatively alone until the last couple of years, according to Kansas State Research and Extension.
References/Read more - US (2)

Mexico: Importan trigo en plena cosecha
The president of the Farmers Association of the Culiacán River criticized that just last week, when the wheat harvest is in full swing, a ship loaded with 11 tons of wheat arrived in port of Topolobampo. However, most of the wheat grown in this part of Mexico is durum. Mexico is net importer of bread wheat. Government is designing a plan to encourage broader cultivation of the bread wheat in Mexico.
References/Read more - Mexico (1), Mexico (2)
South America
Argentina:  Private sector estimates wheat crop reaching 14 million tonnes – counting on increase of planted area from 12 to 15% and reaching 4.1 million hectares.
References/Read more - Argentina

Wheat news from around the world - 2014, Week 17

Wheat export price
HRW (Gulf)* steadily increased from US$ 330/t (4/21/2014) to US$ 342/t (4/25/2014).
France Grade 1 (Rouen)** remained more or less stable during the week around US$ 300 /t.
Main reasons for continuously high prices are concerns over a disruption to supplies from Russia and Ukraine and some damage that happen to winter wheat in US grain plains.
World wheat production
The International Grains Council
on April 25 lowered its forecast for 2014-15 world wheat production to 697 million tonnes, down 3 million tonnes from the I.G.C.’s March outlook and down 12 million tonnes, or 2%, from 709 million tonnes in 2013-14. Even with the lower forecast, the 2014-15 world wheat crop was projected to be second in size only to last year’s record outturn. Download IGC report (pdf)

Unseasonal rain with strong winds across Pakistan and India (Punjab, Haryana, Western UP) has dampened wheat harvesting, sparking fear of losses. How big the losses might be is not yet clear. Read more - Pakistan (1), Pakistan (2), Pakistan (3), India

Wheat procurement in India this year is apparently significantly slower compared to 2013 and government's wheat procurement target for 2014/15 marketing year is likely to be missed and slip bellow last year's level of 25 million tons. Read more - India (1),India (2)
The government's wheat procurement target for the ongoing 2014-15 marketing year is likely to be missed and slip below the last year's level of 25 million tonnes, Food Secretary Sudhir Kumar said today.

South America
Experts in Argentina foresee strong increase (up to 13%) of the wheat area in the next cropping season. One of the conditions of wheat area growth are necessary changes in the current system of wheat trade in Argentina. Read more - Argentina (1)Argentina (2)

Brazil is planning decrease its dependency on wheat imports by increasing wheat acreage. Forecast for 2014/2015 wheat production is up to 6.7 million tons. Wheat area in Brazil during last 5 years is around 2.2 million hectares and wheat production is oscillating between 5 and 6 million tons/year. But acording to EMBRAPA, Brazil could quickly become self-sufficient in wheat production and has potential to produce up to 23 million tons, which is about 4 times more than its current wheat production and almost 3 times more than current wheat production in Argentina. Read more - Brazil (1), Brazil (2)
All the climate models now show an El Nino pattern is likely this year, with six of the seven global models predicting the threshold will be reached as early as July. Seventy per cent of the El Nino events in the past century have resulted in drought over Australia, affecting wheat production particularly in the east coast. Read more - Australia
New strain of the stem rust has infected about 10,000 hectares of wheat farms in southern Ethiopia. Scientists fear it could spread to neighbouring countries and the Middle East. Researchers at CIMMYT, the Ethiopian Institute of Agricultural Research, the US Department for Agriculture’s Cereals Disease Laboratory and the Global Rust Reference Center in Denmark, say the strain is similar to the one detected in Egypt, Germany and Turkey between 2007 and 2013, but where no impact on production was noticed. Read more - Ethiopia

Government of Egypt, the world's largest importer of wheat, is expecting more wheat than ever before from local farmers this year, thanks to the introduction of a new nationwide system of contractual farming. The world’s largest wheat importer is expected to buy 4.25 million tons of local wheat by July this year, almost half of the projected harvest's 9.6 million tons.
On the demand side Egypt will try to save half the money it spends on wheat subsidies by issuing a new smart card system to ensure that the cheap bread goes to only the neediest. Read more - Egypt (1), Egypt (2)

*(US Wheat, Hard Red Winter, Fob US Gulf ports)
**(EU - France Grade 1 Rouen)