With more and more of the northern hemisphere moving through their winter wheat harvest, the market driver for wheat is turning from supply to demand. The next USDA World Ag Supply and Demand Estimates report is due out on August 12th US time.
In last months WASDE we saw major importer demand move higher by just 100ktpa to 132.48mt. Global supply fell 1.16mt to 1072.57mt (carry in 263.98mt + production 808.59mt). The world stocks to use ratio remains high though, seeding a feeling of supply security.
With the supply side all but locked in for winter wheat we focus the supply side on the spring wheat crops around the world, which to be fair is not a small portion of total wheat supply. Plus the Aussie and Argie crop to come in after the northern hemisphere spring wheat crops, but supply is looking secure.
Canada, a major spring wheat producer, saw some showers across the Prairies over the last week, too little too late for some, but helpful to others. Canada is expected to harvest an average or slightly below average wheat crop this year according to most analyst. Last months WASDE report had them in for 36mt. This is well above their average for the last two years were production was 34.96mt last year and 32.95mt in 2023-24. So potentially the USDA may reduce Canadian production this weekend. The 30 day rainfall anomaly for Saskatchewan shows the majority of spring wheat country, bar a small area of the central west, has only seen 60-80% of average rainfall this summer.
The US spring wheat region is generally looking good in the east, mixed central and a little dry in the west. The major production states of N.Dakota and MN are in much better shape that their northern neighbours though. Spring wheat makes up around 28% of the US wheat crop. Spring wheat exports flow out of the PNW, as do many Canadian tonnes, into the Asian market. There has been some talk of disease in US spring wheat. Falling test weight in standing wheat in OK and TX may also weight on US production estimates. US / Indonesia wheat deal is concerning, 1mtpa isn’t chicken feed.
Kazakhstan and Russia also produce a lot of spring wheat for export. Their season to date has been soft, 125% to 150% of average 30 day rainfall.