Forecasts of a good wheat harvest in the US and the EU continue to lower stock prices

After speculative growth of 15-20% during the month amid frosts in Russia, wheat prices this week fell by 2.5-4.2% due to improved crop forecasts in the EU and the US after heavy rainfall, as well as profit-taking by traders.

Russian authorities announced that they need to reseed not 500 but 830 thousand hectares of spring crops, which is 1% of the total area in the country. Agency SovEcon amid unfavorable weather in the Central and southern regions has lowered its forecast of wheat production in Russia in 2024 by 7.3 to 85.7 million tons, which is 1 million tons below the 5-year average.

Traders switched their attention from Russia to the weather in the United States and Europe, particularly in the black sea region, where conditions are favorable for the development of crops.

Agency Strategie Grains raised its forecast of production of soft wheat in the EU in 2024/25 MG from 121,8 to 123,5 million tons due to increased harvest in Spain, but this figure will be inferior to the collected in 2023/24 MG 126,1 million tons. Forecast corn crop in the EU reduced from 63.4 to 63.3 million tons, which will exceed last year’s 62.4 million tons.

Crop tour of Kansas showed that the average yield of HRW wheat may reach 3.13 t/ha (2.02 t/ha last year and 2.85 t/ha on average for 5 years), and the total wheat production in the state will reach 7.9 mln tonnes, which is 8.4% higher than the USDA’s May forecast.

July futures for new crop wheat yesterday rose:

• by 0.4% to 243,7 $/t – for soft winter SRW wheat in Chicago (-3.5% since Monday),
• by 0.3% to 247,4 $/t – for hard winter HRW wheat in Kansas City (-4%),
• by 0.9% to 264,8 $/t – for hard spring HRS wheat in Minneapolis (-2.5%),
• by 0.9% to 248.5 €/t or 270 $/t – September wheat futures on the Paris Euronext (-4.2%).

Forecasted precipitation in the coming days in the South-East of Ukraine and South of Russia will improve the condition of wheat crops and crop prospects.

Tags: USA, crop forecast, EU, prices, Spain