Canada Markets

Global Wheat Markets Can't Catch a Break

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
Connect with Cliff:
@CliffJamieson
After a string of increases to global wheat production and consumption data estimates for 2014/15 since the USDA's first estimate in May, both estimates were trimmed in today's report. The green/yellow bars represent production and consumption for 2013/14, while the blue/red bars represent the monthly estimates for 2014/15. (DTN graphic by Scott R Kemper)
After a string of increases to global wheat production and consumption data estimates for 2014/15 since the USDA's first estimate in May, both estimates were trimmed in today's report. The green/yellow bars represent production and consumption for 2013/14, while the blue/red bars represent the monthly estimates for 2014/15. (DTN graphic by Scott R Kemper)

Today's USDA report saw global production and consumption estimates lowered for the first time since the monthly 2014/15 estimates were released in May. This move is counter to a recent estimate from the November AMIS Market Monitor, an initiative of the United Nations, which most recently boosted global production by 4 million metric tonnes to 723 mmt. The USDA reduced global production by 1.26 mmt to 719.86 mmt.

The largest shift in production was found in Australia, where a 1 mmt cut to 24 mmt was questioned by some who were looking for a deeper cut of 2-3 mmt. Shifts in demand were reported in Egypt due to changes in consumption due to changing subsidy programs, while South Korean feed usage is also reported to be negatively impacted.

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Global market supplies remain heavy. An average of Dow Jones pre-report estimates was looking for a 900,000 mt cut in ending stocks from the October estimate today while the USDA instead bumped up ending stocks by 300,000 mt to 192.9 mmt. This remains the highest carryout since 2011/12 and leaves the stocks/use ratio steady from October at 27%, up from 26.4% from last year according to USDA data.

Despite the weaker global data, U.S. production and ending stocks were lowered slightly, acting to support prices. December HRS rose 8 cents, SRW rose 2 3/4 cents and HRW rose 3 3/4 cents.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow Cliff Jamieson on Twitter @CliffJamieson

(ES)

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After a string of increases to global wheat production and consumption data estimates for 2014/15 since the USDA's first estimate in May, both estimates were trimmed in today's report. The green/yellow bars represent production and consumption for 2013/14, while the blue/red bars represent the monthly estimates for 2014/15. (DTN graphic by Scott R Kemper) 
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