Wheat Exports From Russia May Dominate In 2017/18 While U.S. Market Little Changed


- U.S. wheat balance sheet unchanged with exception of sale to Iraq.

- Russia slated to lead world in wheat exports in 2017/18 marketing year.

- U.S. Wheat futures decline 5.8 percent during October.

The USDA’s November WASDE report shows lower forecast U.S. wheat ending stocks due to increased exports. However, recent sales to Iraq account for the entire increase. The 680,000 metric ton decline in U.S. ending stocks account for most of the global decline of 600,000 metric tons. Without the decline in U.S. stocks, global stocks would have been flat to higher.

Wheat Supply & Demand
Production, Use, Beginning & Ending Stocks

With the exception of a 680,000 metric ton increase in exports due to recent sales to Iraq, the U.S. wheat balance sheet is largely unchanged. However, there were a few key changes internationally.

Russia will be the world's leading exporter of wheat during the 2017/18 marketing year if current forecasts hold. Russia increased its already record windfall production with another 1 million metric ton increase.

Canada raised its estimate of ending stocks by 150,000 metric tons due to lower forecast imports and domestic feed use. According to Agriculture and Food Canada, improved crop genetics have played a role in Canada's wheat crop this year. In spite of below-average drizzle, yields were in line with the five-year average.

The European Union increased its production estimates by 450,000 metric tons, adding directly to ending stocks. Estimates of India's ending wheat stocks dropped by 500,000 tons due to reduced imports. Low local wheat prices have made imports less competitive.


The USDA's estimate of the average farm price is $4.60 per bushel, unchanged from October. During the month of October, both wheat futures and the Teucrium wheat ETF (WEAT) were down 5.8 percent.


One of the reasons U.S. futures and cash prices were flat to down was due to year-over-year wheat sales down just over 16% during October. Figure 1 illustrates year-over-year net wheat sales from October 5, 2017, to November 2, 2017, compared to the previous year.



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