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Getting the Wheat Procurement Right

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by Sachina Garg
29 June 2015

Wheat prices in United States, the top wheat exporter, have been plummeting since 2012 reflecting higher wheat ending stocks year-on-year, widening of supply demand gap and falling crude oil prices. US wheat prices are falling by an average of 18% for the past three consecutive years and are further likely to decline by nearly 15% in the new crop year 2015-16, beginning June'15.   Wheat prices may moderately increase during the end of year 2015 due to small estimated increases in wheat consumption, commencing of festive season in US and slight rise in demand from feed industry. However, the falling export demand for US wheat due to opening up of wheat sales from Russia, strengthening of US Dollar and rising wheat production in Europe is likely to push the prices significantly down in 2015-16 in the US.   US wheat prices are expected to touch a 10-year low in the next crop year and fall below 450 US cents/bushel mark during August - September'15. This could be the best recommended locking price and period for wheat procurement organizations in crop year 2015-16.   Author: Sachina Garg

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