A soft start to 2024 wheat prices

The US Department of Agriculture rated at 43% ‘good’ or ‘excellent’ the condition of winter wheat in the state of Kansas, up by nine points since the previous reading in late November. The rating in neighbouring Oklahoma rose too, by 14 points to 67%.

While ratings for some smaller growing states, such as Colorado and Nebraska, eased from pre-winter levels, the improvement in Kansas, which is typically responsible for roughly one-quarter of US winter wheat output, provoked crop confidence and encouraged the removal of some risk premium.

Chicago soft red winter wheat futures for March-24 stood down by 0.9% in late morning deals, testing support at the US$6.00/Bu mark, with European contracts showing less resilience against Chicago decline.

London feed wheat for May-24 shed 0.5%, also facing the headwind of a modest recovery in sterling against the dollar, while Paris milling wheat for March-24 dipped by 0.8%, falling below €220/t for the first time in nearly two years.

Investor concerns over the ability of EU wheat exports to compete against Black Sea supplies have been stoked by data showing Ukrainian grain shipments last month growing by some 500 000 t year on year for December to 7.2 million t, despite the collapse of the Black Sea grain export deal. Ukraine’s wheat exports last month grew by nearly 300 000 t from December 2022 to reach 1.8 million t.

Tags: Ukraine, exports, grain, prices, US, wheat, crop, shipments