Some Interesting Facts And Figures
During a heavy weekends research in preparation for various projects I currently have on the go I've done quite a lot of digging into the 2007/08 wheat price surge and stocks & usage back as far as the early 90's.
From a UK perspective the big rally of 2007/08 began in early June (spooky coincidence maybe?).
On 1st June 2007 front month London wheat was GBP99.50/tonne, by the end of September it was trading at GBP180/tonne. Prices then had a shake out falling to GBP145/tonne by mid-November before surging to fresh front month all-time highs in February 2008 of GBP192.50/tonne.
Then the bubble burst, we were down below GBP100/tonne by the end of September and sub-GBP90/tonne before the middle of October.
Another interesting fact for you is that despite the USDA raising their US export hopes last week by 6 MMT for 2010/11 to 33 MMT, projected wheat ending stocks in the US are still the second highest in the last ten years. And even with sharp reductions all round to production from the FSU, the world wheat ending stocks to use ratio for 2010/11 is still the second largest in the past eight years:
Another interesting statistic comes from analysing where these wheat stocks actually are. Back in the tight S&D year of 2007/08 the world's top exporters* accounted for 40 MMT of world wheat ending stocks, in 2010/11 that figure is set to be almost 35% higher at just under 54 MMT.
Where are those stocks? They're all in America, who now look well placed to reap the benefits of not competing aggressively with Black Sea discount sellers during the past couple of seasons, meaning that their stocks have risen more than threefold from 8 MMT to almost 26 MMT.
* Argentina, Australia, Canada, Europe, Kazakhstan, Russia, Ukraine and the US.
From a UK perspective the big rally of 2007/08 began in early June (spooky coincidence maybe?).
On 1st June 2007 front month London wheat was GBP99.50/tonne, by the end of September it was trading at GBP180/tonne. Prices then had a shake out falling to GBP145/tonne by mid-November before surging to fresh front month all-time highs in February 2008 of GBP192.50/tonne.
Then the bubble burst, we were down below GBP100/tonne by the end of September and sub-GBP90/tonne before the middle of October.
Another interesting fact for you is that despite the USDA raising their US export hopes last week by 6 MMT for 2010/11 to 33 MMT, projected wheat ending stocks in the US are still the second highest in the last ten years. And even with sharp reductions all round to production from the FSU, the world wheat ending stocks to use ratio for 2010/11 is still the second largest in the past eight years:
Another interesting statistic comes from analysing where these wheat stocks actually are. Back in the tight S&D year of 2007/08 the world's top exporters* accounted for 40 MMT of world wheat ending stocks, in 2010/11 that figure is set to be almost 35% higher at just under 54 MMT.
Where are those stocks? They're all in America, who now look well placed to reap the benefits of not competing aggressively with Black Sea discount sellers during the past couple of seasons, meaning that their stocks have risen more than threefold from 8 MMT to almost 26 MMT.
* Argentina, Australia, Canada, Europe, Kazakhstan, Russia, Ukraine and the US.