Wheat futures markets improved slightly over the past week as news of falling wheat production estimates and lower maize area in the US filtered into sentiment.

But it still looks like there will be more than enough wheat produced globally as a result of higher production estimates from Australia, Canada and Russia, in particular. But early harvest yields around Europe appear disappointing.

More wheat about

While production in the EU is lower, current estimates for Australia add an additional 11mt on last season, with another 5mt in Russia and 2mt in Canada, according to the International Grains Council (IGC). That’s 18mt extra from just these three countries.

On the negative side of production, the EU is currently estimated at around 5mt less wheat than last year, with the US down 1mt.

The IGC projects global wheat production at 767.6mt, some 5.5mt higher than the previous year

However, the AHDB reports that the analyst firm SovEcon reduced its estimate of Russian wheat production by 1.8mt to 80.9mt, but this number is still higher than that used by the IGC. Nonetheless, markets will be concerned that Russia’s agriculture minister has suggested that its April-June export quota could become a permanent feature.

The IGC projects global wheat production at 767.6mt, some 5.5mt higher than the previous year. But with consumption running lower and only up fractionally at 751.4mt, world closing stocks of wheat are forecast to increase yet again to 289.9mt, up 16.3mt on this season.

Harvest indications

Projections drive market sentiment until harvest takes place. And early indications show that the French winter barley harvest is having disappointing yields so far.

Even earlier indications for its winter wheat harvest are similar, with yield levels below expectation. However, there is still relatively little harvested to take these comments as a trend. Early harvest indications from Russia follow a similar trend, with yields there also lower than had been expected.

Native market

These reports put a firmer tone in markets and widen the gap between price expectations of buyers and sellers. While the market for old crop has largely passed at this point, if someone needs spot, the price would be around €200/t for wheat and spot barley is back to around €170/t.

Earlier this week, Glanbia offered its growers €155 and €136/t for green crop at harvest

New-crop prices are slightly stronger than last week, with wheat back up to around €190/t and barley at €170/t.

Earlier this week, Glanbia offered its growers €155 and €136/t for green crop at harvest or €188 and €169/t for dry crop in November, for wheat and barley respectively.