The poor condition of wheat crops in the US supports stock market quotations

The global wheat market remains under pressure from a strong supply, but traders are increasingly worried about production forecasts for the new season. Against the background of the expected decrease in the harvest in Ukraine and the Russian Federation, experts are monitoring the state of crops and production estimates in the USA and the EU, which are the main world exporters of wheat, and will determine the dynamics of world prices in the next season.

Yesterday, USDA’s NASS released its first weekly 2023 Crop Status and Crop Forecast Report. Nearly 28 percent of the U.S. winter wheat crop is in good or excellent condition, up from 30 percent last year. The drought that has prevailed since August in the Southern Plains continues to worsen crop prospects.

In Kansas, only 16% of winter wheat crops are in good or excellent condition, and 57% in poor and very poor condition, in Texas – 18% and 47%, respectively, in Colorado – 27% and 33%, in Oklahoma – 26% and 40%, and these states are its main producers.

The European Commission published the first forecasts of production in the EU in 2023/24. It is expected that compared to the previous season, the production of soft wheat will increase from 126 to 130.9 million tons, domestic consumption – from 98.8 to 99.1 million tons, final stocks – from 18.1 to 21.9 million tons , and exports will remain at the level of 32 million tons.

According to FranceAgriMer, as of March 27, France had 94% of soft wheat crops in good or excellent condition, matching last week’s level and exceeding last year’s 92%. At the same time, the number of durum crops in good or excellent condition for the week decreased from 92% to 91%, which is still higher than last year’s 87%.

Yesterday, May futures on the main exchanges fell:

• by 0.2% to $253.4/t – for soft winter SRW wheat in Chicago (-2.2% for the week),
• by 0.3% to $320.6/t – for hard winter HRW wheat in Kansas City,
• by 0.2% to $326.8/t – for hard spring HRS-wheat in Minneapolis (+1.3% for the week),
• by 0.4% to €255.25/t or $288.6/t – for wheat on the Paris Euronext.

May futures for Black Sea wheat in Chicago remained unchanged at $279.58/t.

Tags: Ukraine, prices, France, wheat, USA, crop condition