Another USDA report has come and gone, this time resulting in some good news for wheat. All three US wheat futures were higher by the close as the report reduced world supplies by 4.2mt. The big changes were to the Indian and Kazakhstan crops. India was pulled back to 87mt, well below official Indian estimates. Who is correct will become more evident over the next couple of month. India has seen some improvement in their weather across the NW over the last 30days but heavy isolated storms don’t lift national estimates.
Global use was increased by 500kt due to higher feed wheat consumption. My guess a large slice of that is Canadian durum.
The most important number, world ending stocks, were reduced by 4.7mt to 248.61mt, still 8.5mt higher than last year’s carry out, total 2016 – 17 production sits at 748.24.
Australian and Canadian production estimates were left unchanged at 33mt and 31.7mt respectively. There is a good chance they have the carry over estimate for Canada wrong at 6.16mt though as exports have been slow for durum.
The crux of the matter is still evident and that is Chinese carry over stocks. Currently estimated at 111.09mt it represents about 45% of all wheat stocks. The US at 31mt and then the FSU states at 22mt are the next in line. Basically what the numbers tell me are that between the Black Sea States, China, the USA and India they hold 70% of world wheat stocks.