October 3, 2014

U.S. Wheat Associates is advising buyers not to delay wheat purchases as high quality wheat supplies are not as high as they might seem.  While it is true that U.S. wheat inventories are up 2.4% year on year, they are down 11% on the five year average for this time of year with 38% being stored on farms compared to 30% last year.  This higher on-farm storage is decreasing the available stocks for U.S. export.  The U.S. Department of Agriculture (USDA) also expects India, the world’s second biggest wheat producing country, to cut its wheat exports to 3 million tons after unusually high shipments of 6 million tons in the 2013/14 season.  Russia has also exited the global wheat export market earlier than usual this year as domestic prices and demand jumped because of issues surrounding the crisis in Ukraine.  In addition, rains have affected the quality of wheat being harvested in almost every wheat producing country in the northern hemisphere, meaning it will only be suitable for animal feed, so buyers looking for a particular quality of wheat will need to consider buying before high-quality supplies dwindle.

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