In W36 in the wheat landscape, the Food and Agriculture Organization (FAO) estimates global wheat availability at 1.1 billion metric tons (mt) in the 2023/24 season, a slight decrease of 0.18% compared to 2022/23. However, there are important differences in production and stock. Global wheat stocks surged by nearly 20 million metric tons (mmt) to reach 314.4 mmt by the end of the 2022/23 season, partially due to high prices in 2021/22.
Conversely, 2023/24 global wheat production is expected to drop by over 20 mmt to 781.1 mmt, driven by a reduced wheat harvest in Australia and the Black Sea region. Global wheat consumption is projected to increase by 4.3 mmt to almost 785 mmt in the 2023/24 season, primarily due to improved consumption in India. Despite low production and increased consumption, global wheat stocks are anticipated to rise slightly to just over 315 mmt by the end of 2023/24, maintaining a stock-to-use ratio close to 40%.
High-quality wheat premiums are rising in the European Union (EU), driven by growing concerns about wheat quality, especially in Poland, a major producer of high-protein wheat. Heavy rainfall at the end of the spring season significantly deteriorated the quality of both soft and durum wheat crops. Delayed harvests due to rainfall occurred in Germany, Poland, Denmark, and northern France, while adverse weather conditions affected wheat quality in Italy and Spain.
As a result, European importers are expected to increase wheat purchases with a protein content of 13% to 15% from Canada. This follows a 54% year-on-year (YoY) increase in Canadian wheat imports by EU countries from July 1 to August 28. Agriculture Canada anticipates Canadian wheat exports to reach 19.8 mmt in the 2023/24 season, almost similar to the 20 mmt shipped in the 2022/23 season.
Market experts and producers indicate that the grain quality from the new wheat harvest in Russia reached record highs in several regions. Rosselkhoznadzor reports that 71.2% of the examined wheat grain met food-grade standards (grades 1 to 4). Natural indicators reached a six-year high weighted average value of 792 g/l. Wheat protein content also increased compared to the 2022/23 harvest, averaging 13.2% in the Novgorod region and 12.7% in the Volga region. Some regions in the south of Russia reported good grain quality despite challenging weather conditions. However, there were reports of reduced wheat quality and yields in other areas due to rainy weather. The delay in harvesting due to fuel shortages affected the grain collection pace, but the expected impact on grain quality is insignificant. High fuel prices also pose a threat to winter wheat sowing.
Lastly, a notable pricing imbalance emerged in the Russian wheat export market in W36. The official price listings for class 4 wheat with 12.5% protein stood at USD 180.57/mt excluding value-added tax (VAT) carriage paid to (CPT) port, while actual purchases were notably low, ranging from USD 169.95/mt to USD 172.07/mt. This imbalance could be attributed to excess wheat and barley stocks in ports, alongside a significant supply volume for sale. Some deep-sea port terminals were compelled to halt grain acceptance for export temporarily.