Wheat futures in the US were at $6.95 per bushel, bouncing near the 20-month low of $6.65 touched on March 9th amid expectations of a strong Brazilian supply. Russia also reported it has no objection to extending the grain deal that places a safe trade corridor for exports of grain out of Ukrainian Black Sea ports. Ukraine is one of the world’s top exporters and the current deadline is March 18th deadline. Ukraine, like Russia reported to have a stronger winter wheat harvest than previously expected.
Brazil productivity highest ever registered
Official estimates indicate the Brazilian wheat output may set a record, this offsets for now at least, lower supply in Argentina, which is the number one supplier to Brazil. The higher harvest is favoring wheat exports expected to increase and make Brazil the 10th biggest wheat exporter in the world. Argentina is still the top wheat supplier to Brazil, having sent 84.3% of the total volume imported, followed by Russia and Paraguay.
In Brazil, the season ended in 2022, and Conab estimated the output at 10.55 million tons, a record, with productivity forecast at 3.4 tons/hectare and the area with wheat crops, at 3.08 million hectares. This productivity is the highest ever registered in Brazil.
USDA’s estimates released last week
USDA’s WASDE report confirmed that output from the world’s top producers is set to increase.
- The USDA forecasts the world output of wheat at 788.9 million tons, 0.7% higher than that estimated in Feb/23 and 1.2% above that in the 2021/22 season.
- World consumption estimates were revised up in the monthly comparison, to 793.2 million tons, a slight 0.1% up from that in 2021/22 and above the world production.
- Exports are estimated to total 212.3 million tons in 2022/23, 0.4% higher than that forecast in February and 3.4% above that last season.
- With consumption higher than production, ending stocks are estimated at 267.2 million tons, 0.8% down from that estimated in February and the lowest in six years.
Russia
Top exporter Russia is projected to sell up to 60 million tonnes of wheat on foreign markets in the current marketing year, according to President Putin’s speech to the country’s Federal Assembly. Russia harvested a record-high 153.8 million tonnes of wheat in 2022. Russia reported it has no objection to extending the grain deal that places a safe trade corridor for exports of grain out of Ukrainian Black Sea ports. To disagree would also hurt Russia’s own exports.
From The TradersCommunity Research Desk