Global supplies lowered, but WASDE still bearish
September 14, 2017
Despite an increase of 3.5 million tonnes in Russian production to a record 81 million tonnes, we saw global wheat supplies lowered 1.6 million tonnes in last night’s USDA WASDE report. A decrease in opening stocks, as well as an increase in use were the main drivers behind the move. This supported Chicago values, with December wheat futures finishing up 7.25USc/bu.
A strong Aussie dollar is still keeping local values in check to an extent, however Australian grain still remains uncompetitive globally. With cheaper alternatives currently flooding the market, Australian origin grains are an unattractive option to buyers, however we should see the market level out and demand pick up towards the end of the year as supplies from these alternative streams slows down.