Surplus harvest forecast drives wheat prices to multi-month lows

Forecasts of abundant wheat supply from key global regions have led to a significant decline in prices on the global market. On Thursday, the most actively traded European wheat futures contract on Euronext in Paris settled at €192 per ton, marking the lowest level since March 2024.

This decline reflects shifts in market dynamics driven by expectations of robust harvests in Europe and other regions. The strengthening of the euro against other major currencies has also weakened the competitiveness of European exports, further pressuring prices.

Significant market pressure stems from a large wheat supply from the Black Sea region, particularly Russia. According to the Russian consultancy IKAR, Russia’s wheat harvest forecast has been raised by 0.5 mln tons to 86 mln tons, with export estimates increased to 43 mln tons, signaling the strength of Russia’s agricultural sector.

In Ukraine, the largest farmers’ union projects a wheat harvest of 21.8 mln tons, surpassing the Economy Ministry’s expectations. These forecasts confirm a stable supply, contributing to the decline in global market prices.

Canada, a key wheat supplier, anticipates a harvest of 35.5 mln tons, according to Statistics Canada. While slightly lower than last year’s record, this volume remains substantial, ensuring stability in global supplies.

Carsten Fritsch, an analyst at Commerzbank AG, noted that the completion of harvests in the northern hemisphere has not eased price pressures, as abundant harvests are also expected in the southern hemisphere, particularly in Australia. The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) may soon revise its June forecast of 30.6 mln tons upward to 32–35 mln tons.

The surplus supply from various regions creates challenges for the wheat market, driving prices down and impacting the strategies of producers and exporters. Analysts predict that this trend may persist in the coming months, complicating market conditions.

Tags: Australia, Ukraine, Russia, EU, prices, Canada, wheat, USA, crop forecast