Wheat Futures Down with Lowest US Exports Since 1971-1972

Wheat futures closed the week down 1.39% despite bouncing Friday with a broad set of other commodities higher as the U.S. Dollar retreated from recent highs on Fed speak. Weakness for the week came from the USDA cutting its 2022-23 outlook for U.S. wheat exports by 50M bushels to 775M bushels, the lowest amount of domestic wheat exports since the 1971-1972 marketing year. The high US dollar is biting “reduced supplies, slow pace of export sales, and continued uncompetitive U.S. export prices” the USDA blames for the lower export forecast.


In its monthly WASDE report, the government also cut expectations for U.S. wheat ending stocks by 34M bushels to 576M bushels, which would be the lowest since the 2007-08 marketing year.

The price direction will depend on how much wheat and corn actually comes out of Ukraine in the coming weeks. The deal has been recently criticized by Vladimir Putin, who wants to see amendments added to it before it is extended in November.

The USDA’s release of the June 30 Acreage report all-wheat acres firmed 1% higher from last season, with 47.1 million acres fueled the previous selling.

Wheat Futures Highlights

  • December Chicago SRW futures eased 1.25 cents to $8.48,
  • December Kansas City HRW futures dropped 3 cents to $9.4675,
  • December MGEX spring wheat futures added 1.5 cents to $9.64.
  • Preliminary volume estimates were for 51,608 CBOT contracts, sliding moderately below Thursday’s final count of 72,707.

Wheat Technical Outlook

KnovaWave analyze US Wheat futures given its high beta relationship and more liquid aspect as an investment vehicle.

Wheat closed under the Tenkan this week again after its recent rally was reversed last week between the 50 and 61.8% Fibs. It had been drawn higher by the flat weekly cloud and supported by 0/8 which held. The contract has stabilized after it continued its sharp impulsive collapse fueled from when it retested and broke the Tenkan (orange). This came about after a failure at retesting the 8/8 move and high after it spat 8/8, and the minimum target. It had completed a measured 4/8 correction off highs then broke key support at 38% then 50% and 50wma confluence in the freefall. From here Wheat support at that $700 cloud confluence with the breakup level at 61.8% resistance, then Kijun and Tenkan.

WEAT ETF Weekly Chart via KnovaWave

USDA Wheat Stocks

NASS data showed wheat stocks were 1.776 bbu for Sep 1. That was within the range of estimates but under the average expected. Last season saw 1.774 bbu of wheat stocks on 9/1. Q1 usage was implied at 543 mbu off the 1.650 bbu production and carry-in.

Last season saw an implied Q1 use of 717.5 mbu. Specific class production saw 1.104 bbu of winter wheat with 531 mbu of HRW and 337 mbu of SRW. Other Spring wheat was 482 mbu with 64 mbu of durum. White wheat was 272 mbu.

WAOB Wheat Stocks

The world balance sheet saw some shifting around, with smaller US stocks. Carryout was down just 0.18 MMT to 267.34 MMT. Russian wheat production was up 6.5 MMT to 88 MMT, which took stocks 2.75 MMT on larger exports and use. EU production was down 2 MMT, with Ukrainian stocks down 1 MMT. 

Wheat Acreage Highlights

All-wheat acres firmed 1% higher from last season, with 47.1 million acres. “If realized, this represents the fifth lowest all-wheat planted area since records began in 1919,” USDA notes. Here’s a closer look at the acreage breakdown:

  • Winter wheat – 34.0 million acres (up 1%)
  • Hard red winter wheat – 23.5 million acres
  • Soft red winter wheat – 6.86 million acres
  • White winter wheat – 3.61 million acres
  • Spring wheat – 11.1 million acres (down 3%)
  • Durum wheat – 1.98 million acres (up 21%)

Wheat stocks eroded 22% lower from a year ago, meantime, to 660 million bushels. That was slightly higher than the average trade guess of 655 million bushels. Of the total, 93.0 million bushels are in on-farm storage (down 34% year-over-year), with the remaining 567 million bushels stored off the farm (down 19% year-over-year). Disappearance between March and May totaled 364 million bushels, which was down 22% from the same period last year.

Effect of Higher Input Costs on Farmers

A recent report by the Agricultural and Food Policy Center (AFPC) at Texas A&M University shows higher input prices are having a larger impact on farmers than originally thought.

  • Net cash farm income on the representative feed grain and oilseed farms is projected to decline by an average of $534,000 from 2021 to 2022 across the 25 feed grain and oilseed farms.
  • Representative wheat farms face an average reduction in net cash farm income of $399,000.
  • Representative cotton farms face an average reduction in net cash farm income of $716,000.
  • Rice farms face the largest reduction in net cash farm income per farm at $880,000 and a per acre reduction of $442.

Compiled by Joe Outlaw, Ph.D., and Bart Fischer, Ph.D., co-directors of the AFPC.

Global Wheat Output

The International Grains Council raised global wheat output by 8 MMT to 778. That is still down from 781 MMT in 21/22. Wheat carryout stocks were upped by 3 to 275 MMT – still under 280 last season.

Wheat Exporters


The U.S. Department of Agriculture cut its 2022-23 outlook for U.S. wheat exports by 50M bushels to 775M bushels, the lowest amount of domestic wheat exports since the 1971-1972 marketing year. The USDA cited “reduced supplies, slow pace of export sales, and continued uncompetitive U.S. export prices” for the lower export forecast.

In its monthly WASDE report, the government also cut expectations for U.S. wheat ending stocks by 34M bushels to 576M bushels, which would be the lowest since the 2007-08 marketing year. .


Wheat harvest in the Canadian Saskatchewan province had grain harvest 81% complete through 9/26. Spring wheat was specifically 83% complete and durum was 96% out. BAGE reported their initial 22/23 wheat harvest as 17.5 MMT for Argentina, down by 22% yr/yr.


The Grain Industry Association of Western Australia expects wheat output to reach 12.1 MMT from the West, up from their prior estimate of 10.75 MMT.


IKAR raised their forecast for Russia’s crop 2 MMT to 97 MMT.  Last week Russia’s agriculture ministry announced today that it would downgrade its current forecasts for 2022/23 wheat exports of 1.837 billion bushels if production fails to reach a target of 4.777 billion bushels. That’s certainly possible, given a late start to the season due to cold weather, which is now leading to a slower than usual harvest.

Russia’s agriculture ministry reported Friday that the country is prepared to export as much as 30 million metric tons of grain (presumably most of which will be wheat, along with some corn and barley) during the second half of 2022.

“This will support countries in need and help stabilize the global food situation,” according to a statement the agriculture ministry issued. Russia is the world’s No. 1 wheat exporter.


Ukraine accused Russia Friday of intentionally delaying the loading of 150 ships with grain that are hoping to soon depart from the country’s Black Sea ports. In a video address, President Volodymyr Zelenskiy indicated that the delay is affecting the shipment of 3 million metric tons of grain.

Ukraine continues to face large production and export challenges amid the ongoing Russian invasion. Meanwhile recent rains have left soil moistures at their best levels in a decade, according to Ukraine’s state weather forecasting center. That should allow for a strong start to the 2022/23 season for winter crops.

Ukraine’s Ag Ministry reported last month harvest reached 99% complete, with 19.5 MMT counted. That is down from 33 MMT last year. Ukraine’s fall harvest is around 60% complete, according to a statement from its agriculture ministry today. Wheat accounts for the lion’s share so far, with 705.5 million bushels. Barley has made the second-most progress, and Ukraine is only at the very beginning of its 2022 corn harvest.

Ukraine’s Agri Council lobby group expect to see ~50% reductions to winter grain planted area. Last year’s area included 8.4m HA (~20.8m acres) with 6.2m HA (~15.35m acres) of wheat. 

EU Soft Wheat Production

European Union grain trade association Coceral raised its soft wheat production estimates to 5.254 billion bushels, citing improved weather in Spain. The group also slightly raised its estimates for French soft wheat production, which is in contrast to some other forecasts because the country has recently been suffering through ample hot, dry weather.


French soft wheat plantings for the 2022/23 season are 46% complete through October 17, up from 21% a week ago and ten points above last year’s pace of 36% so far, according to French farm office FranceAgriMer. France is Europe’s top grain producer.F


Argentina has missed out on most of the recent rainfall, leading BAGE to cut the wheat crop forecast to 17.5 MMT from 20.5 MMT reported in May.

The BA Grain Exchange reported that recent frosts in Argentina have caused damage to the country’s 2022/23 wheat crop. Last season, Argentina’s wheat production reached 823 million bushels, but planted acres are down around 9% from a year ago


A devastating heat wave this spring has tanked Indian wheat prospects after five years of bumper crops. Private wheat exports from India were banned in mid-May to ensure domestic availability.

India’s ag attaché cut the wheat crop there to 99 MMT. This is 7 MMT below the July WASDE and shaves exports by ½ MMT to 6 million.

Global Wheat Importers


Egypt is the world’s top wheat importer and sources a large percentage of its supplies through Ukraine.

Egypt’s purchase total from yesterday’s tender results was increased from 640 to 760 K, from French and Russian suppliers.

Earlier in the month Egypt’s Supply Minister Aly Moselhy said in a news conference on Sunday the country has strategic reserves of wheat sufficient for 5.7 months, He added that the country has procured 3.9 million tonnes of wheat in the local harvest so far.

He added that the strategic reserves for sugar were sufficient for more than six months and those for vegetable oils are sufficient for 6.2 months, while the country is self-sufficient for rice for 3.3 months. The country is a significant importer of all these commodities.


Turkey made provisional purchases of milling wheat totaling 17.3 million bushels in an international tender that closed earlier today. The grain can be sourced from optional origins, with Russia expected to emerge as a major supplier. Shipment will range between November 1 and December 13.


Algeria is thought to have purchased as much as 9.2 million bushels from optional origins in a tender that closed earlier today. At least some of the total is expected to be sourced from Canada, although additional details were not immediately available. The grain is for shipment in October and November.

Saudi Arabia

Saudi Arabia issued an international tender to purchase 19.7 million bushels of wheat from optional origins, which is in alignment with its plan to maintain strategic stocks and fulfill domestic milling needs. The grain is for delivery between November and February.


Pakistan passed on all offers for its international tender to purchase 11.0 million bushels of wheat that closed earlier this week. A similar tender is likely to be issued soon, especially considering the fallout from devastating floods that caused an estimated $30 billion in damages earlier this year.

Crop damages due to devastating floods in Pakistan are expected to be more than $1.5 billion. “According to the preliminary estimates, cotton, rice, maize, pulses, potatoes, tomatoes, sugarcane, wheat, chilies, tobacco, oil seeds, millets and garlic were among the vegetables damaged because of the floods,” according to a report that assessed the damages.

South Korea

South Korean feed mills purchased 4.4 million bushels of animal feed wheat, likely sourced from Australia, in recent private deals without issuing an international tender. The grain is for shipment between mid-October and mid-December.


Japan will import nearly 500,000 bushels of feed-quality wheat for livestock use following a simultaneous buy-and-sell auction that was held earlier today. The country’s agriculture ministry had initially sought up to 2.6 million bushels of feed wheat and 1.8 million bushels of feed barley in today’s SBS auction. The grain is for arrival in Japan in late January.


The Philippines purchased 1.7 million bushels of animal feed wheat, likely sourced from Australia, in an international tender that closed on Thursday. The grain is for shipment in January.


Thailand issued an international tender to purchase as much as 6.6 million bushels of animal feed wheat from optional origins that closes today. The grain is comprised of three consignments that would be for shipment in February, March and April.

COT on Commodities

  • Weekly Commitment of Traders data from CFTC showed managed money was 22,051 contracts net short in CBT wheat futures and options as of 10/18. That was a 2,549 contract stronger net short through the week via a roll of existing longs to new shorts.
  • In KC wheat, the CoT report had spec traders at 26,270 contracts net long, just 238 contracts weaker wk/wk.
  • The funds were 307 contracts less net long in MPLS wheat, for a 3,809-contract net long as of 10/18. 

Commodity Round Up


  • The Bloomberg Commodities Index fell 2.1% (up 12.2% y-t-d).
  • Spot Gold rallied 0.8% to $1,658 (down 9.4%).
  • Silver surged 6.3% to $19.42 (down 16.7%).
  • WTI crude slipped 56 cents to $88.05 (up 13%).
  • Gasoline added 1.2% (up 20%),
  • Natural Gas sank 23.2% to $4.96 (up 33%).
  • Copper gained 1.5% (down 22%).
  • Wheat declined 1.0% (up 10%),
  • Corn slipped 0.8% (up 15%).
  • Bitcoin was little changed this week at $19,200 (down 59%).

Risk markets continue to respond to the war in Ukraine and the supply crisis from the Coronavirus outbreak and lockdowns.

Source: TC, USDA, Farm Progress, Reuters

From The TradersCommunity Research Desk