Hopes for a continued move higher in wheat futures may be waning, with the USDA increasing the 2015/16 ending stocks estimate by 1.9 million metric tons to 228.49 mmt this month, a record high and only the seventh time the carryout has exceeded 200 mmt in data going back to 1960. This follows their third consecutive record estimate for global wheat production. This ending stocks figure has been revised higher in four consecutive monthly reports and reflects a global stocks/use figure of 31.9%, the highest level seen since the 2001/02 crop year.
As seen on the attached chart, total global ending stocks have risen since the 2012/13 crop year, as shown by the dark line, measured against the primary vertical axis. The green line, also measured against the primary vertical axis, represents the stocks held by the eight major exporters -- Argentina, Australia, Canada, European Union, Kazakhstan, Russia, Ukraine and the United States. From 2014/15 to 2015/16, global stocks are forecast to rise 16.38 mmt or 7.7%, while stocks held by the major exporters is expected to rise by 4.94 mmt, or a slightly faster rate of 7.9%.
The blue bars, measured against the right vertical axis, indicate the exporter stocks as a percentage of total global stocks. At 29.6%, this number has rebounded from the 2013/14 low of 28%, but is equal to the ratio calculated for the 2014/15 crop year. This calculation for the current crop year is among the lowest levels seen since 2001/2002, but perhaps still reassuring to buyers.
While Canada's ending all-wheat stocks for 2015/16 are forecast at 4.2 mmt by AAFC, below the 5.59 mmt estimated by the USDA, wheat exports as of week 9 of the crop year are well ahead of the pace needed to reach the current export target. Meanwhile, current durum exports are well behind the cumulative pace needed to reach current AAFC targets (licensed shipments only).
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