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Home » News » Articles of Interest- Tuesday, August 13, 2019

Articles of Interest- Tuesday, August 13, 2019

August 13, 2019

Articles of Interest US Wheat Associates

Saudi Boosts Ties With Welcome for Black Sea Wheat

Reuters – 08/08/2019

Saudi Arabia will relax its bug-damage specifications for wheat imports from its next tender onwards, it told Reuters on Thursday, opening the door to Black Sea imports and strengthening ties with Russia beyond energy cooperation. Russia has long sought access to Saudi Arabia’s wheat market as Moscow tries to take further market share in Middle Eastern and North African wheat markets from the European Union and United States. Wheat from the Black Sea did not previously meet Saudi specifications for zero-pest damage, but the governor of state grain buyer SAGO, Ahmad al-Fares, told Reuters that the specifications will be relaxed to 0.5% from the next tender. Saudi Arabia had been one of the last Middle East markets not dominated by Black Sea wheat and Euronext wheat futures BL2Z9 fell in opening trade after the news, but later steadied as Chicago prices turned higher. The change has wider implications as Riyadh, which regards the United States as its most important ally, moves closer to Moscow, with Russian President Vladimir Putin due to visit Saudi Arabia in October.

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Southeast Asia: Growing Milling Industry Relies on Wheat Imports

World-Grain – 08/12/2019

Wheat production in Southeast Asia is small, but the grain plays an increasing part in diets in the region, which is also home to a large milling sector, including one of the biggest milling companies in the world, Indonesian-based P.T. Bogasari. The International Grains Council (IGC) forecast 2019-20 total grain production at 13.3 million tonnes in Indonesia, 8.3 million in the Philippines and 5.3 million in Thailand. The wheat production of the countries of Southeast Asia is too small to register on the IGC’s breakdown. They do produce corn and the IGC forecast their 2019-20 crops at 13.3 million tonnes for Indonesia, 8.3 million for the Philippines, 5.2 million for Thailand and 4.7 million for Vietnam. Thailand is also forecast to produce 100,000 tonnes of sorghum. The lack of home-grown grains makes the region a big importer. The IGC forecast total 2019-20 imports at 11.7 million tonnes for Indonesia, 5.7 million for Malaysia, 7.3 million for the Philippines, 3.9 million for Thailand and 14.8 million for Vietnam. Of those totals, wheat accounts for 11.4 million tonnes for Indonesia, 1.8 million for Malaysia, 6.8 million for the Philippines, 3.2 million for Thailand and 4.4 million for Vietnam. 

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Australia Exports 5.28Mt Wheat in First Half of 2019

GrainCentral – 08/13/2019

AUSTRALIA exported 5.28 million tonnes of wheat in the first half of 2019, with The Philippines, South Korea, Japan and Vietnam its biggest customers by volume, according to the latest data from the Australian Bureau of Statistics (ABS). This is up from the previous six month period covering July to December 2018, when 4.47Mt was shipped. The Philippines has consolidated its position as Australia’s biggest wheat market for bulk and containerised wheat combined, and imported 1.24Mt over the period. According to Lachstock Consulting’s latest Vessel Activity Report, Australia transhipped 961,000t of wheat to eastern ports between January and June, which slots the domestic market in as the second-biggest customer for Australian wheat. This transhipped tonnage is supplying customers who in non-drought years source their requirements from crops grown primarily in New South Wales and Queensland. In terms of export customers, South Korea on 625,994t was the second-biggest customer for Australian wheat, followed by Japan with 508,820t and Vietnam with 451,099t. Over the first half of this year, Indonesia on 415,991t has slipped to fifth place in terms of Australia’s export wheat markets. In Myanmar, the port development at Thilawa and an increased milling capacity have seen this emerging market for Australian wheat transition to bulk from containerised delivery. What is believed to be Myanmar’s first bulk cargo of Australian wheat totalled 25,300t and was shipped in May.

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Wheat Farmers Watching Japan Trade Talks

Montana Ag Network – #/#/####

It’s no secret that trade issues with China are weighing heavy on many wheat farmers minds but here in Montana, but it’s not just the Chinese markets that are cause for concern. The U.S. Department of Agriculture reports that wheat accounts for well over $1 billion in revenue here in Montana each year. Although the air waves have been flooded with tariffs and trade talks with China – Japan is actually the number one purchaser of Montana’s staple crop. “For Montana, Japan is our most important market. They buy approximately 28 to 30% of the wheat that we grow in Montana,” said the Montana Grain Growers Association Executive Vice President Lola Raska. However, after the United States pulled from the Trans-Pacific Partnership in 2017 Montana has been left at a competitive disadvantaged when it comes to selling wheat to Japan. “That left the door open to two of our primary competitors, which is Australia and Canada. Canada specifically because they can grow comparable quality to what we grow here,” Raska said.

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Spread on Chicago and Kansas City Wheat Widens

AgWeek – 08/11/2019

The wheat markets were generally lower on the week with the exception of Chicago as spreading became the main feature. The funds are apparently buying Chicago and selling the Kansas City spread on anticipation of further declines to the soft red crop production estimates. The previous wide point of the spread was about 72 cents before narrowing to about 55 but now it has widened further to 80 cents. The sour tone started with Egypt tendering for wheat with no U.S. wheat being offered. Ukraine and Russia were the lowest bids. European Union wheat estimates are showing better than expected yields. France, Germany, England and Poland are estimated to see 8.7% to 14% or higher yields than 2018. France increased its soft red wheat harvest estimate to 38.2 million metric tons, which if realized would be 12% higher than last year. Matif Wheat futures had a dismal week on these estimates breaking major support of $173 per metric ton in the September contract.

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Source: U.S. Wheat Associates

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