I seriously doubt we have heard the last from the Chinese in regards to wheat?
Jul 17, 2013
Wheat harvest numbers out of Russia and the Ukraine are starting to become more accessible. From what I have heard up to this point, Russia has harvested about 21.5 million metric tons vs. about 12 million at this point last year. Bulls in the trade however are pointing to the fact yields are coming in lower than had been originally predicted. This is true, but just keep in mind they are still running about 25% above last years level. Adding those two together - nearly double the crop and 25% better yield - is making it tough for the wheat market to gather much upside momentum. Russia is also still severely undercutting global prices and once again is the reigning "low-cost" provider. One positive is that Iraq has reportedly become concerned about Russia's wheat "quality," and is rumored to be seeking offers from US, Canada, and Australia, at obviously higher costs, but better quality. Rumors are also circulating that the Chinese government might be done with their US SRW wheat buying binge, most likely moving on to other varieties at this point, and unfortunately other origins (supposedly now bidding for 500,000 metric tons of Australian wheat). From my perspective, I seriously doubt we have heard the last from the Chinese in regards to wheat...
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