Is there a chance for wheat price growth?

05.05.2017

The 2016/17 wheat season is already drawing to an end, while 2017-crop wheat sales, on the contrary, are gathering pace rapidly. Just two months are left till the harvest and the weather provides surprise after surprise, therefore market participants have focused their attention on the outlook for next season.

The market’s main expectations about the 2017/18 season can be described in the following two key theses: firstly, the world’s harvest is predicted to decline (by 20 MMT according to today’s forecasts); secondly, carryovers from 2016/17 are forecast to be record high. Exactly the inventory data curb market price growth and prompt analysts to write about the world’s heavy supply and demand balance of wheat and its oversupply in the market.

New-crop Black Sea grain is now being priced under the impact of the following two conflicting fundamentals: an expected crop decline on the one hand and pressure from high stocks on the other hand, UkrAgroConsult notes.

Depending on the future wheat crop’s size and quality, the following two scenarios look possible in the current conditions.

Full version of the article is available to subscribers for weekly market report “Black Sea Grain & Oil” and “Online market review” by UkrAgroConsult.

 

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