Market Morsel: The wheat pantry is full.

Market Morsel

The biggest driver of wheat markets tends to be supply. Analysts and traders will look at the supply around the world. There is a big focus on what is happening in the US or Russia, as these markets have huge influence.

If there is a production disaster in these nations, then that has huge ramifications for what is available for the export market.

What I wanted to look at this morning was the situation with the importers.

The first chart below shows the stocks of the top ten importers of wheat, which account for around 50% of total imports.

We can see from this chart that wheat stocks in these ten nations are very high compared to where they were at the start of the century.

If we look at consumption, we can see that it has risen, but not at the same rate that stocks have risen.

The increase from the first five years of the century to the past five years has been 183% for ending stocks and 124% for consumption.

This means that the top ten import nations have a well-stocked pantry. So, whilst an issue in the export nations will impact pricing, there is a reasonable buffer.