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Global wheat market: protein premium boosts spring wheat to a new high in more than 10 years

 Last Update: 2021-11-11
 Source: Internet
 Author: User

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Foreign media October 31 news: the week ended October 29, 2021, the global wheat market prices continue to rise, because the global wheat market, tight supply and demand, especially high protein wheat supply will help increase protein spring wheat price premium, Set the highest price in more than a decade
.

On Friday, the Chicago Board of Trade (CBOT) December soft red winter wheat futures rose by about 16.
75 cents or 2.
2% from a week ago, to close at 772.
75 cents per cat
.
The December hard red winter wheat futures on the Kansas City Futures Exchange (KCBT) closed at about 785.
75 cents/bus, up 11.
75 cents or 1.
5% from a week ago
.
The December hard red spring wheat futures on the Minneapolis Grain Exchange (MGEX) closed at approximately 1,052.
25 cents per bus, up 39.
25 cents or 3.
9% from a week ago
.
Euronext's March 2022 milling wheat futures will report approximately 279 Euros/ton, an increase of 4 Euros or 1.
5% from a week ago
.
The spot price of Argentine wheat is 307 US dollars/ton, up 14 US dollars or 3.
7% from a week ago, FOB price
.

Spring wheat market uses price increases to curb demand

This week the spring wheat market took the lead in a strong climb, hitting the highest level in a decade and a half, mainly due to the drought in spring wheat producing areas in the United States and Canada this year, which led to a sharp decline in production and tight supply
.
The U.
S.
Department of Agriculture predicts that the U.
S.
hard red spring wheat production in the 2021/22 season will be 8.
08 million tons, a year-on-year decrease of 44.
1%
.
The U.
S.
Department of Agriculture estimates that Canadian wheat production is 21 million tons, lower than the 23 million tons forecast last month and 40.
3% less than the previous year
.
The Canadian Department of Agriculture and Agri-Food expects that the Canadian wheat production in 2021/22 will be 21.
715 million tons, a year-on-year decrease of 38.
3%
.
Beijing Derunlin analyst Ping Chuan said that the US spring wheat market adjusts demand through price increases, and at the same time attracts farmers a variety of spring wheat next year
.
This also indicates that the competition for arable land between corn, soybeans and spring wheat in the United States will be very fierce next spring
.

　　At present, the price of spring wheat has risen by about 90.
5% over the same period last year, and the corn market has risen by 42.
6% during the same period
.
The strong momentum of the spring wheat market attracts speculative funds to continue to increase their holdings
.
The latest data from the US Futures Trading Commission (CFTC) shows that as of the week of October 26, speculative funds held a net long position of 16,512 contracts in the MGE spring wheat futures and options market, an increase of 192 contracts from a week ago and an increase of approximately from the same period last year.
140%
.

　　European wheat exports hit a 20-year high

　　The tight supply of high-quality wheat has also prompted global wheat buyers to import European wheat at an unprecedented rate
.
Some analysts predict that in the first four months of the 2021/22 season (July to October), wheat exports from the 27 EU countries may exceed 11 million tons, an increase of 25% year-on-year and the highest level in the same period in 20 years
.
The strong demand for wheat exports from the European Union has pushed the Paris milling wheat futures price to a record high
.
International buyers bid for high-protein wheat from Northern Europe, Algeria is also turning to Northern European wheat, and China purchases French wheat in large quantities
.
The U.
S.
Department of Agriculture estimates that EU wheat exports this year will reach 35.
5 million tons, replacing Russia as the world's largest wheat exporter
.
However, analysts believe that the strong export pace of the European Union may be unsustainable because Argentina in the southern hemisphere will soon harvest new wheat to provide competitive prices for price-sensitive North African buyers, despite the high transportation costs of Argentina to North Africa
.

　　U.
S.
winter wheat is rated higher than last year, and rising chemical fertilizer prices may lead to reduced fertilization

　　According to the National Crop Progress Weekly Report released by the US Department of Agriculture, as of October 24, 80% of winter wheat planting in the United States had been planted, 70% last week, 84% last year, and the five-year average for the same period was 80%
.
This week, the US Department of Agriculture released its first good rate rating for winter wheat in 2022, of which 46% of winter wheat was rated good, higher than 41% in the same period last year, but lower than the 54% expected by analysts on average
.

　　Discussions about rising fertilizer prices also support the wheat market
.
Farmers may reduce the fertilization of hard red winter wheat crops in the United States in 2022, which will make the U.
S.
wheat production in 2022 lower than the potential level
.
As nitrogen plays a key role in the formation of protein, and the supply of high-protein wheat has been severe this year, this has helped the Minneapolis Grain Exchange’s high-protein spring wheat hit a high level in more than 10 years, further increasing the protein premium
.

　　U.
S.
wheat exports remain slow

　　The US Department of Agriculture’s weekly export sales report shows that for the week ending October 21, 2021, the US’s 2021/22 net wheat sales were 269,300 tons, a decrease of 26% from last week and a decrease of 31% from the four-week average
.
So far this year, U.
S.
wheat export sales totaled 12.
61 million tons, a decrease of 22% from the same period last year
.

　　Black Sea wheat prices rise

　　After a short break, Russian wheat export prices resumed their rise last week, as the ruble strengthened and international wheat prices rose
.
According to the Moscow consulting agency IAKR, the FOB price of 12.
5% Russian protein wheat delivered in early November at the Black Sea port for the week ending October 22 was US$312 per ton, an increase of US$2 from a week ago
.
SovEcon, another Moscow-based consulting agency, said that the price of Russian wheat was US$316 per ton, up US$3 from a week ago
.
In 2021/22 (July to June of the following year) so far, Russian wheat exports have decreased by 29% year-on-year, partly due to the uncertainty of export tariffs
.
This week Russia continued to raise export tariffs on wheat
.
Consulting firm IKAR narrowed the forecast range of Russian wheat production in 2021 to 75 million tons to 75.
6 million tons, and the earlier forecast range was 74.
5 million tons to 75.
5 million tons
.
IKAR forecasts that Russia’s wheat exports in 2021/22 will be 31.
5 million to 32 million tons, which is the same as earlier expectations
.

　　Argentina's wheat production is raised, but the weather ahead is worrying

　　The Buenos Aires Grain Exchange said this week that Argentina’s wheat production in 2021/22 is expected to be 19.
98 million tons, which is higher than the previous forecast of 19.
2 million tons due to recent favorable rains
.
However, the exchange said that the possible dry weather in the Pampas grain belt in the next few weeks is still worrying
.
The wheat harvest is mainly concentrated from December to January
.
However, the current wheat harvesting work has been completed 6.
7%, with a yield of 1.
03 tons per hectare
.

　　EU wheat production is lowered, but exports are expected to remain unchanged

　　The European Commission released monthly supply and demand data on Friday, lowering the EU wheat production forecast for the 2021/22 season to 130.
3 million tons, 700,000 tons lower than the previous forecast of 131.
0 million tons
.
However, the inventory has increased by 700,000 tons, from the earlier expected 13.
2 million tons to 13.
9 million tons, because the increase in the beginning of the inventory and the reduction in the use of wheat feed exceeded the reduction in production
.
The forecast value of EU wheat exports in 2021/22 remains unchanged at 30 million tons
.

Wheat price protein

　　Spring wheat market uses price increases to curb demand

　　European wheat exports hit a 20-year high

　　U.
S.
winter wheat is rated higher than last year, and rising chemical fertilizer prices may lead to reduced fertilization

　　U.
S.
wheat exports remain slow

　　Black Sea wheat prices rise

　　Argentina's wheat production is raised, but the weather ahead is worrying

　　EU wheat production is lowered, but exports are expected to remain unchanged

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