Wheat prices received support from positive market news

Wheat market continues to receive news that contribute to further increase in stock prices, so traders are actively buying wheat futures.

The experts of Rusagrotrans lowered the forecast of wheat production in Russia in 2024/25 MY from 92-96 to 77.4 mln tonnes compared to the February estimates, while other analysts estimate it at 81-83 mln tonnes. At the same time, the forecast for wheat exports was reduced by 6 million tons to 43 million tons.

the Indian authorities after the parliamentary elections, which will be held on June 4, may cancel the 40% duty on imports of wheat to restore supplies, to stop the rise in prices and to replenish stocks, which in state warehouses in April fell to a 16-year low of 7.5 million tons after the government sold to millers 10 million tons of grain to support prices in the run-up to the elections. The last time India imported wheat was in 2017/18 MY.

Experts expect that this year’s wheat harvest in India will be 6.25% lower than the projected agriculture Ministry of the country 112 million tons, imports will amount to 3-5 million tons, and domestic prices will exceed the minimum purchase price set by the state 22750 rupees/t or 273 $/t.

Prices also support the results of recent tenders. According to StoneX, flour millers from Taiwan purchased 97 thsd tonnes of milling wheat from the U.S. at 273-325 $/t FOB for July-August shipment, while importers from Thailand bought 60 thsd tonnes of feed wheat of arbitrary origin at almost 300 $/t C&F for early June shipment.

At the same time, the news from Iran and Australia may reduce prices. According to the Ministry of Agriculture of Iran, the country plans to stop the wheat imports by March 25, 2025, as the domestic production will meet the demand. In 2023/24 MY, Iran harvested 10.5 mln tonnes of wheat, and imported only 1 mln tonnes. Recall that in 2021/22 MY the wheat harvest amounted to only 4.5 mln tonnes, so the imports increased to 7 mln tonnes. And in 2022/23 MY, the production reached 7.5 mln tonnes, while imports fell to 3 mln tonnes.

Most of the agricultural regions of Australia received favorable rains, which will increase in the coming months due to the arrival of La Niña, which will improve the potential of the wheat harvest.

Tags: prices, wheat