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Turner's Take Ag Marketing | India Bans Wheat Exports

By: Craig Turner, Senior Risk Management Consultant

Turner's Take Ag Marketing
 
Craig Turner
Senior Risk Management Consultant
Turner's Take Podcast

INDIA BANS WHEAT EXPORTS | The big news right now is India banning wheat exports.  There is some debate on what led to the ban.  Production estimates are coming down.  New crop was estimated around 110 MMTs and that would allow India to export about 10 MMTs of wheat, which filled a big gap left from Ukraine unable to get wheat out of the Black Sea.  The average guess right now is India has around 100 MMTs and might be able to export 1 to 2 MMT this marketing year. The bulls argue the crop is in the low to mid 90s and India could be importing wheat in Q1 or Q2 of 2023.  

 

Another interesting argument going around this morning is if India will allow private export sales.  India does not want government entities (China) coming into their market and buying up all available global wheat at the start of the marketing season.  Remember that China came into the US market during harvest last year and with massive buy orders.  This concept brings a new dynamic to the food security export bans we have been seeing.  On one hand a nation has the obligation to make sure they can feed their own population first, and then on the other hand they don’t want one nation to buy up all available feed stocks in bulk. 

 

GRAINS & OILSEEDS | The wheat issues the world is facing can't be solved after one good harvest.  The way things are going this could be a multi-cycle issue that takes a few harvests to get back to adequate global wheat stocks for the major exporters.  That said, it is hard to be bearish any substitutes and that includes corn (feed) and rice (food).  Oilseeds have been a follower but vegetable oil has its own bullish story due to short crops and high demand for biofuels.  Feed wheat and corn need to be priced high enough to make sure feed demand flows into meal.  Even with average yields this summer in the N. Hemisphere it is hard to be bearish given the global tight stocks, the Black Sea war, and the sub par crops many regions have produced in the past year.

 

Farmers can be patient with new sales.  Specs will buy the dips.  End users should be using breaks to catch up on coverage for the rest of 2022.

Craig TurnerCraig Turner
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