Forecasts of favorable weather and a good harvest lower wheat prices

Wheat quotes on world exchanges last week fell by 2.6-4.5% on forecasts of improved weather in the US and the EU, as well as new estimates of world wheat production from the IGC for 2023/24 MY.

IGC experts left the forecast for the world wheat harvest in FY 2023/24 at the level of 787 million tons (803 million tons in MY 2022/23), as the decrease in the production forecast for the US from 51.4 to 49.4 million tons will be offset by an increase in estimates for the EU from 136.6 to 137.8 million tons and the Russian Federation from 82.8 to 83.6 million tons. It is expected that world wheat stocks in the 2023/24 MR will decrease compared to the previous season from 284 to 277 million tons, and the total global grain stocks – from 584 to 581 million tons, which will be the minimum since 2014/15 MY.

Forecasted for the next 5-7 days, heavy precipitation of 20-50 mm in the states of Oklahoma, Texas, Kansas and Colorado will improve the condition of the crops and the prospects of the harvest.

May futures for wheat on world exchanges fell on Friday:

• by 0.9% to $243.2/t – for soft winter SRW wheat in Chicago (-3.1% for the week),
• by 0% to $308.9/t – for HRW hard winter wheat in Kansas City (-4.5%).
• by 1% to $311.2/t – for hard spring HRS-wheat in Minneapolis (-0.2%).
• by 0.5% to $277.5/t – for Black Sea wheat in Chicago (-0.7%).
• by 3% to €242.5/t or $266/t – for wheat on the Paris Euronext (-2.6%).

The news about the ban of certain EU countries on the import of grain from Ukraine has almost no effect on the market, since the export of Ukrainian wheat amounted to 13.9 million tons (of which 900 thousand tons in 20 days of April), which almost corresponds to the updated forecast of the USDA, so by the end of the season of significant deliveries are not expected.

Purchase prices for wheat in Ukraine continue to fall, as traders have almost stopped purchases at the ports, and processors are offering UAH 6,800-7,200/t with delivery to the mill.

Tags: Ukraine, prices, wheat, USA