Last week this column included a brief summary of the United States Department of Agriculture's recent World Agricultural Supply and Demand Estimates on wheat.
The summation was global wheat stocks-to-use are projected to be tight and as such should be supportive to wheat prices.
During last week the annual crop tour through Kansas, the US's largest producer of winter wheat, put yield estimates at the lowest levels since the year 2000.
Despite this, global wheat futures ended last week lower. So, what are the major drivers of global wheat markets currently if not global stocks and US winter wheat conditions? There are a number.
Russia extended the Ukrainian grain corridor last week giving the market some renewed confidence grain will continue to flow from the region, and they won't let the world starve despite the war.
Analysts indicate crop conditions through Canada and the European Union are generally favourable at this stage.
In the US, while the winter crop conditions are not looking great, the market appears optimistic the spring crop plantings will be large. This includes potential substitutes for wheat such as corn.
In last week's WASDE report the USDA projected 2023/24 US stocks-to-use at 18 per cent which is up from 12pc the year before.
The US corn crop is being planted and still needs to grow, but expectations are for a good size crop.
Interestingly world stocks-to-use without China are projected to improve year-on-year but remain relatively tight at 12pc.
Global wheat futures appear focused on the potential for the world to grow more grain this season yet with relatively tight ending stocks any production issue is likely to support prices.
Given global futures started the year at relatively high values historically, the market seems comfortable eroding the risk premium for now.
Locally there appeared to be healthy appetite from Australian buyers actively searching and trying to buy grain through last week despite the lead from offshore futures.
Forty different buyer businesses purchased grain through Clear Grain Exchange which saw a broad lift in prices across many commodities and grades around Australia.
Many areas of Australia are relatively dry or drying and it appears growers are sensibly taking a cautious approach to their seeding programs.
This may have sparked some renewed buying interest from domestic users and exporters looking to get more cover after diminishing their grain purchases from earlier in the year.
There were 31 grades of wheat, barley, canola, oats, lupins and faba beans traded at prices growers were targeting last week. There remains opportunity for growers.
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