"Flour millers face supply crunch as wheat farmers tighten grip on stocks"

From Reuters, November 20:

• Summary

• Farmers in top exporting countries hold wheat for better prices
• Global wheat prices near four-year low amid bumper harvests
• Asian millers covered for 2 months' supply, Gulf for 45 days
• Russian farmers sell to earn high interest, but supply limited

SINGAPORE/CHICAGO, Nov 21 (Reuters) - Wheat growers in several exporting countries are reluctant to sell their crops with prices near four-year lows, traders, farmers and millers say, leaving flour makers with dwindling supplies and vulnerable to any potential upswing in prices.

 

Typically grain processors buy wheat three to four months in advance. But millers in Asia, including Indonesia, the world's No. 2 wheat importer, are currently covered for about two months, and in the Middle East, most grain processors only have up to 45 days of supplies, two millers and a trader said.

 

The limited supply held by flour makers reduces their buffer against any production shortfalls that would trigger a rally in world prices, with global reserves already projected to reach a nine-year low, and fuel food inflation.

 

Farmers are hoarding their crop as global wheat prices have slumped to their lowest since 2020 on solid output in Australia and Argentina and on improved growing conditions in major exporting regions including the U.S. and Black Sea region....

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