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Global wheat markets face tightening supplies as farmers in major exporting regions, including the U.S., Australia, and the Black Sea, hoard crops amid low prices. Millers in Asia and the Middle East are grappling with reduced stock coverage, risking vulnerability to potential price hikes. Meanwhile, global wheat inventories are forecasted to hit a nine-year low by mid-2025. High interest rates discourage stockpiling, further exacerbating the supply crunch. Russian farmers are selling some stocks, but limited quotas may strain global exports. Weather concerns in the northern hemisphere could trigger price surges, raising food inflation risks worldwide.

Key Highlights

# Wheat prices slump near four-year lows, reducing farmer sales.

# Millers in Asia and the Middle East face tight supplies.

# Global wheat inventories expected to hit a nine-year low.

# Russian export quotas could limit future wheat shipments.

# Weather risks in the northern hemisphere threaten price stability.

Global wheat markets are witnessing tightening supply as farmers in key exporting regions, including the U.S., Australia, and the Black Sea, hold back sales due to low prices. Black Sea wheat with 12.5% protein, now offered at $265 per metric ton, has fallen from $275 just weeks ago, while Australian Premium White wheat prices have dropped to $280 per metric ton from $290. Farmers remain reluctant to sell, awaiting better prices amidst strong harvests in the southern hemisphere.

Supporting this trend, Australian farmers are focusing on selling other crops like chickpeas and canola for immediate cash flow. Similarly, U.S. farmers are storing grains in silos, hoping for domestic price recovery or disruptions in competing regions. This withholding behavior limits global wheat availability, heightening risks of price volatility.

Millers in Asia and the Middle East are particularly strained, with stock coverage reduced to less than two months in Asia and 45 days in the Middle East. High interest rates deter stockpiling, further exposing flour makers to potential price hikes. Meanwhile, the USDA projects global wheat inventories will hit a nine-year low by mid-2025, despite robust southern hemisphere production.

In Russia, attractive interest rates have encouraged some farmers to release their stocks, easing the crunch slightly. However, upcoming grain export quotas, significantly smaller than last year’s 29 million tons, may restrict future exports. Weather uncertainties in the northern hemisphere remain a significant concern, as any disruptions during crucial crop development stages could spark global price rallies.

Finally

Wheat markets face growing supply risks as farmer stockpiling, low reserves, and weather uncertainties create potential for price surges, threatening global food security.

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