Wheat prices continue to fall in anticipation of the May USDA report

The sharp fall in stock indices and oil prices in the United States indicates the approach of the crisis and increase pressure on quotations of agricultural products, demand for which is declining due to high prices.

Last week’s rainfall in the United States delayed the sowing of spring crops, but improved the condition of winter wheat crops, which reduced stock quotes.

According to the weekly report Crop Progress, as of May 8, spring wheat in the United States sown 27% of the planned area, and seedlings received 9% of the area, while the average 5-year figures are 47% and 15%, respectively.

The number of winter wheat crops in good or excellent condition for the week increased by 2% to 29% (49% last year), in particular in Texas only 7%, in Colorado – 11%, Montana – 13%.

Wheat exports from the United States for the week decreased by 40% to 236.8 thousand tons, and in total in the season reached 19 million tons compared to 23.75 million tons on the same date last year. Therefore, it will be very difficult to reach the projected USDA of 21.36 million tons by July 1.

July futures on US stock markets fell yesterday:

• $ 5.7 / t to $ 401.5 / t for soft winter SRW wheat in Chicago,
• $ 2.3 / t to $ 427.8 / t for winter hardwood HRW wheat in Kansas City,
• $ 0.55 / t to $ 442.7 / t for September HRS-wheat durum futures in Minneapolis.

Traders expect the USDA’s May report, which will be released on Thursday, to increase estimates of wheat production in the United States and world reserves as a result of reduced trade due to the war in Ukraine.

• August futures for Black Sea wheat in Chicago last week rose 6.4% to $ 380 / t, as the market so far sees no prospects for stopping the war and unblocking Ukraine’s ports.

According to FranceAgriMer monitoring, as of May 2, 89% of winter wheat crops in France were in good or excellent condition, compared to 91% a week ago and 79% last year.

• September wheat futures on Paris’ Euronext fell 3 € / t to 394.5 € / t yesterday, but rose 4.5% over the week amid arid weather in the EU and rising Black Sea wheat prices.

Forecasts of a significant reduction in wheat production in Ukraine in 2022/23 MY against the background of adverse weather in the US, EU, India and Pakistan support prices for Black Sea food wheat harvest 2022 at a high level of $ 325-350 / t FOB with delivery in July – August.

Tags: Ukraine, EU, prices, France, wheat, USA