Bigger story in wheat is that of demand. Global demand from the countries excluding India, China and eight major exporters remains insatiate.

This huge block of more than 150 nations is scrapping through its inventory level. As per USDA, wheat demand in this bloc has risen by 9.4% since 2016/17 after the same percentage gain in that year alone.

USDA projects the production in this bloc at all- time high of 156 MMT and import availability at 175.65 MMT, another all- time high. This ‘record’ supply is unable to meet a substantially subdued demand growth and the stocks to use ratio is dropping to a decade’s low.

For MY 2021/22, stocks to use ratio is lowest and on a demand growth of only 2%.

AgPulse View

We expect the demand to remain aggressive in securing supplies throughout this year and factors like Russian floating tax, drought affected Canadian crop and EU wheat quality have made the condition far more complex.

The inventory levels will continue to drop and the world will need a demand shift and/or release of stocks from North America, China and India to fulfil this demand supply gap.

Large wheat importers are busy securing their grain supplies; be it Turkey, Egypt, Pakistan, Saudi Arabia, Bangladesh, Jordan or any other country. The market is abuzz with the tender activities and we see the buying agencies to remain aggressive for few more week.