Spring Wheat Futures at Highest Since 2011

Spring wheat futures posted more strong gains on Thursday, helping to lift the market to its highest in a about a decade.

As can be seen on the chart below, the market has climbed to its highest since June 2011 when it reached $11.20/bu. However, the market remains well off its all-time high of $25 achieved in February 2008. Much of the current strength is coming from tight global supplies of high protein, milling quality wheat following drought-reduced crops in the Canadian Prairies and the US northern Plains this year, along with smaller Russian crop, also due to overly dry weather.

In its October supply-demand update, the USDA estimated 2021-22 global wheat ending stocks at 277.2 million tonnes, down 6 million from the previous month’s estimate and the lowest since 2016-17. Canadian wheat (excl durum) ending stocks for 2021-22 are projected by Agriculture Canada to fall to just 3 million tonnes, down almost 2 million or 39% from a year earlier, while total US wheat stocks are pegged by the USDA at 23 million tonnes, a year-over-year drop of almost 5 million or 18%.

In terms of the world’s major exporters (Argentina, Australia, Canada, the EU, Kazakhstan, Russia, Ukraine and the US), combined 2021-22 ending stocks are estimated by the USDA at 50 million tonnes, versus approximately 60 million a year earlier and down roughly 33% from 2016-17. (Ending stocks held by exporters are typically considered a relevant metric for measuring supplies that are available to the world market.)