Grainy Insights: A wheat and corn blog

Naveen Thurkal and Mei Mei Cgu from Reuters (2024) wrote in March that China's wheat imports from Australia for the two first months of the year, January and February, has nearly quadrupled since the same time last year. The trend should continue even though Beijing canceled or postponed 1 million tons of Australian wheat. China is the largest farm good buyer, and they will remain near record highs despite a recent wave of cancellations as lower global prices and domestic output leads to a lack of purchases.  The cancellations, coupled with those affecting approximately 500,000 tons of U.S. wheat, sparked worries about diminishing Chinese demand. Given its significant influence in global agriculture markets, this downturn could potentially trigger a decrease in prices. However, traders and analysts argue that the cancellations are unlikely to affect overall demand significantly. They suggest that lower wheat prices will stimulate buying activity, especially with additional governm...

Russia is the world's fourth largest wheat producer and produces over 90 million tons of wheat annually. Ukraine, on the other hand, is the ninth largest with a production of more than 25 million tons. Combined is the two countries accountable for 15% of the world's wheat production. (IGC, 2024). Russia had what we call a bumper wheat crop in the marketing year of 2022/2023 and in 2023/2024. A bumper wheat crop is an unusually good wheat harvest. Ukraine is affected by the war, but they are actually doing very well production wise. Some areas are not possible to grow, but the yield was 4,6 tons per hectare in 2023/2024 which is 1,4 tons more than Russia is able to in their area. (USDA, 2024). Ukraine´s production and exports has not been influenced as much as first believed and the combination above has led to a surplus coming out of the Black Sea Region which presses the future prices down to a low that we haven't seen in a long time. The ending stocks are also quite high ...

In the end of 2024 it is expected that the U.S. dispute with Mexico over genetically modified corn is going to be resolved, says the U.S. chief Agricultural negotiator McKalip. In 2020 Mexico published a presidential decree that said that the country would ban the genetically modified corn from human diets, arguing that it is posing a threat against the native corn varieties and could pose a threat to human health. McKalip Argues that; “This case is about a lot more than biotech corn. It’s about making sure that nations adhere to the provisions of the trade agreements they’ve already signed and making sure we stick to science as the underpinning of trade”. Mexico buys about $5 billion of U.S. GMO corn each year, most for livestock feed. The background for the dispute is stemming from the Mexican president Lopez Obrador´s 2020 and 2023 Corn Decrees. Mexico has been standing firm on its ban of genetically modified corn, the reasons for their ban and legislative change was because of h...

In the 2023/2024 period, wheat usage for food sees a decrease of 10 million bushels according to the United States Department of Agriculture (USDA). The latest World Agricultural Supply and Demand Estimates (WASADE-645) report, released on February 8th, 2024, outlines a stable supply outlook for U.S. wheat, with lower domestic utilization, unchanged exports, and increased ending stocks. The projected season average farm price remains steady at $7.20 per bushel. For the non-US readers 1 bushel equals 27 kg of wheat.  Globally, there's an uptick in wheat supplies, consumption, and trade, although with a decrease in trading stocks. This surge in supplies is attributed to heightened production in Iraq and Argentina. Global consumption has risen by 1.1 million tons, primarily driven by increased usage in India, where wheat trade is being leveraged to tackle price inflation. Additionally, global trade has increased by 1.2 million tons.  In February 2023/2024, the U.S. corn outlook i...