“Having previously denied and rebuffed initial reports of possible export bans, India has now announced plans to limit exports, sending wheat markets higher—with Chicago wheat pushing up to daily limits.
“However, the ban is not a blanket ban, with governments able to import, Egypt’s GASC reportedly already having agreed to a 0.5Mt order of Indian wheat,” reported CRM Agri.
Late last week, the US Department of Agriculture (USDA) had estimated an 8.5Mt export campaign for next season, but moves to limit export sales and heatwaves dragging on the domestic production outlook may lead to a reduction in export estimates, said those analysts.
Meanwhile, USDA’s latest crop progress report has added to supply worries for wheat globally, noted AHDB in an overview today.
“For the week ending 15 May, just 27% of the US winter wheat crop was rated good-excellent. This was back two percentage points on the week, falling below trade expectations. This move continues the trend of diminishing crop conditions reported for the US since spring reporting began last month. We must look back to harvest 2014 for the last time, at this point, the US reported a greater proportion of its winter wheat crop as poor-very poor, than good-excellent.”
Oilseeds market update
Following what has been an ongoing drought in Brazil, Conab released some positive data late last week, they noted. The Brazilian agricultural agency marginally increased production estimates for both corn and soybeans.
Soybean production estimates were increased by 1.4Mt to 123.8Mt, although still below the USDA forecast in the May WASDE of 125Mt. For Brazil's corn production, Conab increased production estimates by 0.6Mt to 116.2Mt, said the CRM Agri team.
Increased barley usage in UK forecast
Due to the ongoing war in Ukraine, there are large uncertainties for the ability to plant, harvest, and indeed export corn next season, commented CRM Agri in a post yesterday.
“The longer the war in Ukraine continues and export facilities such as Odessa are bombed, the greater the uncertainty and reduced likelihood of a significant export campaign in 2022/23.
“From a UK perspective, corn from Ukraine has become a fixture of UK grain imports. From 2018/19 to 2020/21, grain from Ukraine has represented just under 1Mt of the total season corn imports.”
Trade as a whole however continues to price in an exportable surplus for wheat next season, with UK feed wheat trading at a large discount to new crop Paris milling wheat, presenting further upside in UK feed wheat values relative to Europe throughout next season, said the UK based grain and oilseed market specialists.
“With the outlook for imports from Ukraine next season diminished, the trend for increasing corn usage is likely to reverse. With less corn from Ukraine, demand [in the UK] will be pushed toward domestic wheat and barley.”
