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WMR-Inventories in Major Exporters May Fall to 14 year low

By: Jim Peterson
Posted: Nov 16 2021

World wheat production reached a record high in 2021, but world market values have appreciated due to strong global demand, and declining inventories in key export countries.  Both food and feed demand for wheat have been robust the past two years, due to shortfalls in corn and other feed grains, and solid growth in food use of wheat, especially with in-home consumption in recent years.  For two straight years, global wheat consumption has exceeded global production, resulting in declining ending inventories for world wheat.

The greatest decline in ending inventories in 21-22 is expected across the 5 traditional export countries, which include the EU, the U.S., Australia, Canada and Argentina.  On a combined basis, inventories may fall to 1.4 billion bushels by the summer of 2022.  This would be down nearly 20% from a year ago, and the lowest level since 1 billion bushels in the summer of 2008.  

Since 2008, the Black Sea region has become a much more dominant force, which offsets the importance of carryover stocks in the 5 traditional exporters to some degree, but even with those stocks included, inventories could still reach a 14 year low in key export countries.  This is certainly a positive support factor for prices going into 2022, along with shifts in world trade due to Russia’s export restriction policy.

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