By Alice McFarlane

Wheat prices increase as stocks decline

Aug 18, 2021 | 2:49 PM

MELFORT, Sask.— The United States Department of Agriculture (USDA) has made significant changes to the wheat production estimates.

In the latest USDA report, overall global wheat production dropped by 15 million metric tonnes to 777 million tonnes.

Marlene Boersch with Mercantile Consulting Venture based in Winnipeg said this is a two per cent drop from the July estimate.

“As anticipated, two big declines were in Russian and then Canadian wheat production at 12.5 and 7.5 million tonnes, respectively. That’s a total of 20 million tonnes between the two countries and the size of the cuts exceeded what was expected by the trade.” Boersch said.

Wheat stocks dropped in the eight major exporting countries while the wheat crop estimate in Australia increased by 1.5 million tonnes. Ukraine’s crop was 3.5 million tonnes higher.

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Boersch said the latest reductions in wheat production are a problem for world wheat importers because the lost production in export countries is not easily replaced.

The lower production figures supported the United States and world wheat markets.

Prices soared as the USDA slashed production by major export us by a much larger than expected 17 million tonnes. Boersch said wheat could be a price leader with other origins increasing to match North American prices.

Durham prices are very strong with U.S buyers paying big premiums to Canadian elevator bids.

“We see no reason for growers to push for wheat sales at this time,” Boersch said.

Boersch compiles a weekly market report for the Saskatchewan Wheat Development Commission.

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alice.mcfarlane@pattisonmedia.com

On Twitter: @farmnewsNOW