Global Wheat Glut Ending


June 30, 2017

The USDA forecasts global wheat production to fall for the first time in five seasons. But it may not be enough to bring an end to the global glut.

Production declines aren’t only due to adverse weather conditions. Farmers around the world cut back on planting following years of low prices and experts say protein comes at a premium. In the U.S., the low protein hard red winter wheat crop is driving up demand for spring wheat, but that crop is struggling under drought conditions.

A heatwave in Europe threatens production in France, while Australia’s crop is expected to be 30 percent smaller than last year. China’s expected to grow a record crop, but it rarely exports wheat and currently holds half of global stockpiles. Experts say that limits supplies that are actually available to trade which could create a tighter supply situation for wheat.