Looking at the Black Sea wheat supply, the August WASDE report shows higher combined production in key countries compared to the July report – at 141,2 MMT vs 137 MMT respectively. This became possible due to upward revision of production in Ukraine – by 2.1 MMT to 21.6 MMT and Kazakhstan – by 1.5 MMT to 16 MMT.

However, production in other 5 major exporters, like the USA, Canada, Australia, Argentina, and the EU, is lower in the August report – at 248.6 MMT vs 250.9 MMT in Jul. The drop is mainly because the EU’s forecast decreased to 128 MMT (down 2 MMT m/m). The EU Commission pegged total wheat crop at 127.8 MMT (including durum), due to lower production in the EU, in particular in France – by 0.5 MMT to 30.7 MMT, and in Germany – by 0.16 MMT to 20.2 MMT. Argus sees France’s wheat production at only 25.2 MMT, the lowest in 41 years, after long-lasting rains severely hurt production prospects. The country’s AgMin reduced its forecast too – by 3.4 MMT to 26.3 MMT. We should remind, that French wheat origin is mostly 11% milling wheat. If there is less this kind of quality grain, it will need to be replaced by other origins. And among the major wheat buyers for France we see Morocco, whose wheat import is expected to increase by 1.5 MMT y/y to 7.6 MMT.

If we include beginning stocks, the balance for the Black Sea region shows almost the same month-to-month change, while it looks slightly less tight for the other 5 major exporters.