Improved crop condition in the US and accelerated harvest in Australia and Argentina increase pressure on wheat prices

Wheat quotations on world markets rose last week after Russia attacked a plant in Dnipro with an intercontinental ballistic missile, intensified rocket attacks on Ukraine and a possible escalation in the Black Sea region. But yesterday, prices fell again due to improved crop conditions in the US and the start of harvest in Australia and Argentina, and are now trading at 4-year lows.

According to the Crop Progress from NASS USDA, as of November 24, 97% of the area planted with winter wheat in the U.S. (98% on average for 5 years), and the number of crops in good or excellent condition for the week increased by 6% to 55% (50% last year). Exports of wheat from the United States for the week increased by 83% to 360.5 thousand tons, and in general in the season reached 10.69 million tons, which is 31.15% ahead of last year.

Market for European wheat supported the forecast of a significant increase in sowing areas of winter wheat, 88% of crops are in good condition (83% last year).

Yesterday, the December futures fell, completely losing the growth of the previous week:

• by 1.6% to 196,85 $/t – for soft winter SRW wheat in Chicago (-2.2% for the week),
• by 1.4% to 200.8 $/t – for hard winter HRW wheat in Kansas City (-1.6%),
• by 0.9% to 213.5 $/t – for hard spring HRS wheat in Minneapolis (-0.7%).
• by 2.2% to 214.25 €/t or 224.5 $/t – wheat futures on the Paris Euronext (-1.8%).

In Ukraine, export demand prices remain at the level of 9700-10000 UAH/t or 209-212 USD/t for food and 9400-9450 UAH/t or 202-204 USD/t for feed wheat with delivery to the Black Sea ports. At the same time, the demand prices for milling wheat for delivery to the port of Constanta for the week fell by 4-5 $/t to 222-224 $/t amid a depreciation of the Euro and stock prices.

Export demand prices for Russian wheat with protein 12.5% and delivery in November – December amount to 226 $/t FOB, while for French wheat they reach 238 $/t, and for American – 249 $/t.

On November 25, the Directorate of Food of Bangladesh completed the acceptance of applications for participation in the tender for the purchase of 50 thousand tons of milling wheat of arbitrary origin, – reports Reuters. The lowest price was offered by the Australian company Agrocorp – 286.08 $/t CIF liner out. In addition, Cereal Crop offers wheat at 299.95 $/t CIF free out, and Aston offers Russian wheat at 294.13 $/t CIF free out.

Experts IGC last week lowered its forecast of world wheat production in 2024/25 MG by 2 million tons to 796 million tons due to the reduction of the harvest in the EU.

In the near future, the wheat markets will be influenced by the harvest data in Australia and Argentina and increased demand in those areas, so the black sea wheat market will remain stable.

Tags: crop condition, Argentina, Australia, prices, wheat, USA