Wheat Market Surplus: India’s Record Reserves & Global Price Stability Amid Ample Stocks

Recent developments in the wheat market are shaping a unique landscape as India’s government announces its highest wheat reserves in four years, offering significant implications for global trade, price formation, and market sentiment. As of late July, the Food Corporation of India (FCI) reported over 25.1 million tonnes of wheat in storage—a figure not seen since 2021, backed by robust procurement and record harvests. This surge in reserves, combined with steady government and private holdings, points to a market characterized by abundant supply and suppressed price volatility despite earlier commodity ups and downs. Millers and traders, reacting to brief price dips earlier in the season, have aggressively increased purchases to secure raw material, further adding to inventory bulges. While this serves India’s food security and public distribution objectives, the challenge now shifts to storage capacity and maintaining grain quality as the monsoon proceeds.

These conditions raise pivotal questions: Will India leverage its surplus for exports amid global wheat market uncertainties? Are international prices set for a period of stability, or does the looming risk of overhang temper speculative appetite? As the season progresses, policy shifts and supply shocks elsewhere will be watched closely for price cues. For now, ample supply exerts a cooling effect, but traders remain alert for changes that could reanimate volatility.

📈 Wheat Prices Overview

Exchange/Location	Product	Protein (min)	Price (€/kg)	Price Last Week (€/kg)	Change	Sentiment
CBOT (Washington D.C., US)	Wheat (FOB)	11.50%	0.22	0.22	0%	Stable
Euronext (Paris, FR)	Wheat (FOB)	11.00%	0.28	0.28	0%	Stable
Odesa (UA)	Wheat (FOB)	11.00%	0.20	0.20	0%	Quiet
Odesa (UA)	Wheat (FOB)	10.50%	0.21	0.20	+0.01	Firming

🌍 Global Supply & Demand

• India: As of July, wheat stocks in government storage have reached 25.1 million tonnes, well above the seasonal buffer norm. Private inventories are also elevated, pushing combined reserves to their highest since 2021.
• Exporters: Black Sea region (Ukraine, Russia) and EU maintain stable shipping volumes, while weather and political risks remain under close scrutiny.
• Importers: North Africa, Asia, and Middle East buyers are restocking steadily, with ample supply supporting local price competition.

📊 Market Fundamentals

• USDA Reports: The latest World Agricultural Supply and Demand Estimates (WASDE) report signals robust global wheat supplies, with moderate demand gains.
• Inventories: India, Russia, and Australia report strong carryover stocks, offsetting lower yields in certain drought-affected regions.
• Speculative Positions: Managed money remains net short on wheat futures at US exchanges, reflecting prevailing supply comfort.
• Government Policy: India may weigh export opportunities given surplus stocks but pledges to keep food security as top priority for 2024–25.

🌦️ Weather Outlook

• India: The ongoing monsoon is causing some concerns over grain quality and storage conditions but is not anticipated to cut output significantly this season.
• Black Sea Region (Ukraine/Russia): Mostly favorable weather for harvest, although pockets of dryness in southern Russia may trim yields slightly.
• USA/EU: Mild summer for winter wheat harvest. Spring wheat areas in northern US and Canada face pockets of drought, but impact is currently limited.

🌐 Global Production & Stocks Comparison

Country/Region	2024 Production (Mt)	2024 Stocks (Mt)	Change YoY (%)
India	111	25.1	+10%
Russia	89	15.5	+2%
EU	132	13.2	-3%
Australia	29.5	7.6	+0.5%
USA	49.3	17.3	-2%
China	137.7	63.0	+1%

📆 Trading Outlook & Recommendations

• Global oversupply and India’s record reserves argue for continued range-bound, stable pricing in the near term.
• Watch for Indian government export policy adjustments and any major weather disruptions for potential catalysts.
• Procurement managers: Maintain buying discipline, but consider gradual stockbuilding as seasonal lows emerge.
• Growers: Monitor local weather and storage; sell opportunistically on brief price rallies.
• Speculators: Net short positioning can persist unless sharp tightening develops from export policy or global weather risks.

⏳ 3-Day Regional Price Forecast

Exchange/Market	Current Price (€/kg)	Forecast	Sentiment
CBOT (US)	0.22	0.21–0.22	Stable–Soft
Euronext (FR)	0.28	0.27–0.28	Flat
Odesa (UA)	0.20–0.21	0.20–0.21	Stable