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Global Wheat Outlook
Situation and Perspectives
August 27, 2018
North Asia Marketing Conference
Joe Sowers
Regional Vice President
Philippines and South Korea
US futures prices
HRS
HRW
SRW
75
1
76
0
739743
500
550
600
650
700
750
800M
MT
Production Use
World Production and Use
Global Ending Stocks
4054 52
15
21 23
80 123
179
197
0
50
100
150
200
250
300
89/90 93/94 97/98 01/02 05/06 09/10 13/14 17/18
MM
T
Historical 5 Majors Black Sea Rest of World
Global Ending Stocks and Price
4054 52
15
21 23
80 123
179
197
211
0
50
100
150
200
250
300
350
400
0
50
100
150
200
250
300
89/90 93/94 97/98 01/02 05/06 09/10 13/14 17/18
$U
S/M
T
MM
T
Historical 5 Majors Black Sea Rest of World HRW price
World Ending Stocks
Historical Five Major Exporters include U.S., Canada, Australia, Argentina and EU-27.
Black Sea includes Russia, Ukraine and Kazakhstan.
52 54 52
17 21 23
77 68 70
97 111127
243255
271
0
50
100
150
200
250
300
07/08 09/10 11/12 13/14 15/16 17/18
MM
T
Historical 5 Majors Black Sea Others China
2018 Weather Market
Russian Wheat Situation
5.2 6.3 5.610.8
5961
73
85
25.527.8
38.5
0
10
20
30
40
50
60
70
80
90
100
07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18
MM
T
Beginning stocks Production Imports Exports Domestic use
-20
-10
0
10
20
30
40m
illio
n m
etri
c to
ns
exports
imports
Russian wheat trade
21% of world trade
0
10
20
30
40
50
60
70
80
90M
illio
n m
etri
c to
ns
Russian wheat production
0
10
20
30
40
50
60
70
80
90M
illio
n m
etri
c to
ns
Russian wheat production
HRW/Russian FOB prices
150
170
190
210
230
250
270
290
310
330
350
$U
S/M
T
HRW $US Russian $US
HRW/Russian FOB prices
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
150
170
190
210
230
250
270
290
310
330
350
rub
les/
MT
$U
S/M
T
HRW $US Russian $US Russian ruble
Ruble/$ exchange rate
Ruble/$ and WTI
Black Sea Exports
18.622.8
25.5 27.8
38.5
9.8
11.3
17.418.1
17.2
8.1
5.5
7.67.4
8.0
0
10
20
30
40
50
60
70
07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18
MM
T
Russia Ukraine Kazakhstan
Black Sea Exports and Price
18.622.8
25.5 27.8
38.5
9.8
11.3
17.418.1
17.2
8.1
5.5
7.67.4
8.0
150
170
190
210
230
250
270
290
310
330
0
10
20
30
40
50
60
70
07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18
$U
SD
/MT
MM
T
Russia Ukraine Kazakhstan SRW price
US Soft Wheat Futures
Who knows when they’re going to pull the rug out?
Black Sea Region Situation
Russia, Ukraine and Kazakhstan are the most important wheat producers in the
Black Sea Region.
15.8 20.7 16.8 21.2 18.5
112 118 130
142123
51.5 54.4
69.1
61.0
0
20
40
60
80
100
120
140
160
180
07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19
MM
T
Beginning stocks Production Imports Exports Domestic use
16.0 15.8
29.5
20.418.0
10.1 10.8
0
5
10
15
20
25
30
35
40
45
13/14 14/15 15/16 16/17 17/18 18/19
MM
T
Beginning stocks Production Imports Exports
U.S. Hard Red Winter
US futures prices
HRS
HRW
SRW
Export sales (year to date: August 9)
0.3
4.8
0.8 0.3 0.7
10.5
18.4
18.0
19.5
2.3
9.6
13.812.0
14.2
0
5
10
15
20
08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19
MM
T
Beginning stocks Production Imports Exports Domestic use
Argentina Situation
4.7 4.6 4.7 3.95.7 4.9
23.722.3
31.8
21.3 22.0
16.6 16.1
22.6
15.016.0
0
5
10
15
20
25
30
35
40
08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19
MM
T
Beginning stocks Production Imports Exports Domestic use
Australia Situation
US futures prices
HRS
HRW
SRW
Dry in Canada during planting
Dry in Canada?
Canada Situation
5.26.8
5.3
32.130.0 32.5
20.2
23.0 23.5
0
5
10
15
20
25
30
35
40
45
08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19
MM
T
Beginning stocks Production Imports Exports Domestic use
6.45.2
10.5
15.9
6.2
7.8
0
5
10
15
20
25
13/14 14/15 15/16 16/17 17/18 18/19
MM
T
Beginning stocks Production Imports Exports
U.S. Hard Red Spring
9.9 12.7 15.5 10.7 14.1
157 160145
152
138
35.5 34.827.4
23.5 23.0
0
50
100
150
200
08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19
MM
T
Beginning stocks Production Imports Exports Domestic use
EU 27 Situation
75
8
73
0
742 744
500
550
600
650
700
750
800M
MT
Production Use
World Production and Use
World Ending Stocks
52 54 52
21 2114
72 6860
111127
139
256270
264
0
50
100
150
200
250
300
08/09 10/11 12/13 14/15 16/17 18/19
MM
T
Historical 5 Majors Black Sea Others China
Historical Five Major Exporters include U.S., Canada, Australia, Argentina and EU-27.
Black Sea includes Russia, Ukraine and Kazakhstan.
Global Stocks*-to-Use Ratio
without China
*Ending stocks
18.617.6
27.2
24.523.3
19.7
0.0
5.0
10.0
15.0
20.0
25.0
30.0
04/05 06/07 08/09 10/11 12/13 14/15 16/17 18/19
Pe
rce
nt
Funds and price
Summary/Outlook
Summary/Outlook
• Known knowns
– Global stocks are low and forecast to decline• Excluding China
• Especially in exporting countries
– Demand at record high and going higher
– Production in US, EU, Black Sea
• Known Unknowns
– Production in Canada/Argentina/Australia
– If (when?) the Black Sea shuts down exports• Shifting demand to other exporters
• Unknown Unknowns
– Trade Policies
Top 10 Customers for U.S. Wheat5-year average
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
MM
T
Source: USDA FAS Export sales data
Summary/Outlook
• Known knowns
– Global stocks are low and forecast to decline• Excluding China
• Especially in exporting countries
– Demand at record high and going higher
– Production in US, EU, Black Sea
• Known Unknowns
– Production in Canada/Argentina/Australia
– If (when?) the Black Sea shuts down exports• Shifting demand to other exporters
• Unknown Unknowns
– Trade Policies
