According to USDA, global wheat production is down this month with lower estimates for the European Union, United Kingdom, and Turkey, only partly offset by an upward revision for Russia.
Global consumption raised this month.
Ending stocks are adjusted to the lowest in 5 years with downward revisions in India and the European Union.
About one-half of global stocks are held by China.
High feed demand prompted China to offload some of the multi-year-old government-held stocks into the domestic market via auctions, thus Chinese wheat stocks declined in 2020/21 for the first time in over a decade, while import demand for milling-quality wheat soared and are forecast at high levels again in 2021/22.
Meantime, India wheat stocks now account for 10% of global stocks.
India wheat stocks have ballooned well above desired buffer stock levels.
Tightening global supplies and high global prices has made India wheat competitive for the first time in several years.
Indian wheat export prices averaged an attractive $265/ton in August and have the advantage of lower freight rates to nearby countries.
Exports are forecast to be almost 50% higher than last year and nearly nine times higher than 2 years ago.
If realized, its exports would be the highest since 2013/14.
Global trade, meantime, is forecast higher with imports raised for Iran, Turkey, Algeria, and Saudi Arabia.
Exports are lifted for the European Union, Russia, and India too.
In this context, the U.S. season-average farm price is up 20 cents to $6.90/bu.
Wheat markets has been sell off last Friday as CBOT soybeans got hit by a 25¢ drop due to increasing pessimism over US export potential.
Minny wheat had took the biggest hit.
Cash trade was slow last week with several wheat tenders cancelled as consumers hoped for the effects of a negative USDA-WASDE report.
However, as data showed by USDA, consumers remain poorly covered and finding good quality milling wheat is getting more difficult.
In add, the trade is also watching the Australian forecast closely.
Quality issues could push demand back to N America.
Consequently, export quotes continued to escalate since the October WASDE report, with Hard Red Spring (HRS) shot up by $24/ton to $439.
Soft White Winter (SWW) crept back up $6/ton to $452.
Hard Red Winter (HRW) advanced $4/ton to $362 while Soft Red Winter (SRW) rose $23/ton to $335.
Meantime, the ocean freight markets continued their decline last week, with the Baltic indeces down 13%, 27% and 70% respectively for Handies, Panamaxes and Capesize vessels.
This made prices to destination markets very volatile, and consumers has been reluctant to make any commitments until the freight market calms down.
Among other news, the Gvmt. of Brazil has scheduled a decision on imports of Argentine GM wheat for next Thursday.
Brazilian flour millers remain opposed.
