Since the beginning of the year, world wheat prices have fallen by 3-6.5% against the background of harvesting in Argentina and Australia

During the first week of the new year, wheat prices fell by 3-6.5% amid weak demand and harvesting in the Southern Hemisphere.

According to the Buenos Aires Grain Exchange BAGE, Argentina is completing the wheat harvest, and as of January 4, 12.3 million tons have been threshed from 99.5% of the area (of the planned 5.42 million hectares) with a yield of 2.3 tons/ha, which corresponds to USDA’s forecast of 12.5 million tons, but significantly inferior to last year, when 22.4 million tons of wheat were harvested with a yield of 3.4 tons/ha.

Australia could harvest a record 42 million tonnes in 2022/23 thanks to good wheat yields, according to Successful Farming, while USDA and the Australian Bureau of Agricultural and Resource Economics (ABARES) estimated a December harvest of 36.6 million tonnes. Heavy rainfall although they improved the yield, they worsened the quality of wheat, so the supply of fodder wheat on the world market will increase, which will contribute to a decrease in corn prices. Currently, Australian feed wheat is being offered at $290/t FOB, standard at $300/t FOB, and premium white wheat at $320-325/t FOB.

An increase in wheat supplies from Australia and Argentina is reducing demand for grain from other producers, so for the week of December 23-29, export sales of wheat from the United States fell to a season low of 47,000 tons, and shipments fell to 81,500 tons, reaching a YTD of 10,662 million tons against the USDA forecast of 21.09 million tons.

On Friday, quotations on world exchanges fell:

• by 0.4% or $1.19/t to $273.2/t – March futures for soft winter SRW wheat in Chicago (-6.5% for the week),
• by 0.9% or $2.85/t to $305.7/t – March futures for HRW hard winter wheat in Kansas City (-6.7%).
• by 0.8% or $2.66/t to $331.4/t – March futures for HRS durum wheat in Minneapolis (-4%).
• by $0.25/t to $307/t – January futures for Black Sea wheat in Chicago (-0.4%).
• by 0.6% or €1.75/t to €300/t or $320/t – March wheat futures on Paris Euronext (-3%).

This week, the Egyptian GASC and the Turkish agency TMO will hold tenders for the purchase of food wheat, which will increase pressure on the prices of Black Sea wheat against the background of falling world quotations.

Tags: Australia, prices, wheat, Argentina