Lower prices for wheat appear to be in the cards when assessing the demand and supply equation.
Harvests may have been at record levels recently, but the production of, and trade in, wheat is still subject to exogenous factors. Some may be under human control, others may not.
Behind hay, wheat is the fourth-biggest U.S. crop; corn and soybeans are Nos. 1 and 2, respectively. In fact, wheat covers more of the earth than any other crop.
US Planted Crop Areas
Source: U.S. Wheat Associates (from USDA data – Crop Acreage Report: 6/30/14)
While historically the U.S. may, on average, have produced only around 10 percent of the world’s wheat, according to the U.S. Department of Agriculture, it has consistently been the world’s biggest wheat exporter.
The world’s other large wheat exports are Canada, Australia, the EU-27, Russia, Ukraine, Kazakhstan (often referred to as “Black Sea”) and Argentina. Typically, these account for around 90 percent of the global wheat exports.
The world’s 10 major wheat importers are:
According to the USDA FAS export sales report of Jan. 8, 2015, year-to-date, the top 10 customers for U.S. wheat are:
- The Philippines
On Jan. 12, the USDA published the Foreign Agricultural Service (FAS) updates to its production, supply and distribution database and released its World Agricultural Supply and Demand Estimates (WASDE) report.