Wheat rallied last week posting solid gains from start the week. Heavy deliveries and a strong dollar pressured while technical buying helped wheat recover losses from last week. CBOT Wheat March 16 futures rallied 4% and finished the week 495.40 USc/bu. Up 16.8 USc/bu week on week.
The US winter wheat conditions have remained steady at 55% good to excellent following recent moisture events, and this should allow for the winter wheat to move into dormancy in very good shape.
The USDA Supply and Demand Estimates report released on Thursday saw minimal changes to the US wheat balance sheet. However Global wheat stocks forecasts were raised higher by 2.3 million tons. World wheat production remains at a record high and is raised 1.9 million tonnes to 734.9 million. The upward revision from the November report follows increased production estimates for Canada up 1.6 million tonnes to 27.6 million and the EU.
The USDA reports Australian wheat production will still be at 26 million tonnes, while ABARES recently reduced our production by 1.3 million to 23.96 million tonnes. ABARE also reduced their estimate of Australia’s 2015/16 wheat exports to 16.95 million tonnes from 17.53 million tonnes. (16.6 million In 2014/15).
Brazil’s wheat crop has been lowered again to 5.2 million tonnes down from the 6.2 million tonnes last month. Increasing the potential for wheat imports from the US during 2016.
India’s wheat crop plantings are raising concern with only 200,000 hectares planted vs 242,000 last year, as high temperatures delay plantings, however India still have ample stocks to cover any short/medium term requirements.