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WASD - Wheat

Sep 12, 2012

WHEAT: The 2012/13 U.S. wheat balance sheet is unchanged this month; however, small by-class

adjustments are made to projected exports and stocks. Projected exports for Hard Red Winter

wheat are lowered 25 million bushels with Hard Red Spring and White wheat exports raised 15

million bushels and 10 million bushels, respectively. Corresponding changes are made to projected

ending stocks for these three classes. The projected range for the 2012/13 season-average farm

price is lowered to $7.50 to $8.70 per bushel compared with $7.60 to $9.00 per bushel last month.

Prices reported for the summer months, when producers typically market nearly half the crop, have

remained well below cash bids and futures prices, suggesting substantial forward pricing by

producers earlier in the year.

Global wheat supplies for 2012/13 are projected 3.1 million tons lower mostly due to lower expected

production in Russia. An increase in foreign beginning stocks partly offsets the projected 4.1-millionton

reduction in world wheat output. Beginning stocks are raised for Canada and Egypt, but lowered

for Argentina. Production for Russia is reduced 4.0 million tons with lower reported area and

reduced yields as harvest results confirm additional drought and heat damage to both the winter and

spring wheat crops. Production is also lowered 0.5 million tons for adjoining Kazakhstan, which

experienced the same adverse drought and heat during July and August that affected spring wheat

in the central and eastern growing regions of Russia. EU-27 production is lowered 0.5 million tons

mostly reflecting lower expected yields in the United Kingdom. Ukraine production is raised 0.5

million tons based on higher reported yields. Production for Afghanistan is raised 0.4 million tons

mostly on higher reported area.

Global wheat consumption for 2012/13 is lowered 2.6 million tons mostly on lower wheat feed and

residual use in Russia and Kazakhstan. Food use is also lowered slightly for both countries with

additional reductions projected for food use in Egypt and Nigeria. Food use is raised for

Afghanistan, Iran, and Libya.

Global wheat trade for 2012/13 is lowered slightly this month with imports reduced for China, Egypt,

EU-27, Israel, and Nigeria. Import increases for Turkey and Iran limit the global decline in trade.

Exports are reduced 2.0 million tons for Ukraine based on the recent agreement between

government officials and grain traders to limit shipments because of concerns about tightening

domestic supplies. Higher expected exports for Brazil, EU-27, and Turkey mostly make up for the

Ukraine reduction.

World ending stocks for 2012/13 are projected 0.5 million tons lower with changes to a number of

countries. The largest declines in stocks are for Russia, EU-27, China, Brazil, and Argentina. The

largest increases are for Ukraine, Canada, Iran, and Turkey.

DISCLAIMER: This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Read Entire Disclaimer.

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