Wheat quotations fell by 2.3-3.5% amid higher crop forecast for Russia

Despite an abnormal heat wave in Ukraine and southeastern Europe that could reduce the spring wheat harvest, wheat prices fell on the back of the USDA report and increased production forecasts in Russia by local agencies.

ICAR raised its forecast for the Russian wheat harvest by 1.2 million tons to 83.2 million tons, although the Ministry of Agriculture left its forecast at 86 million tons, compared to 92 million tons last year.

Wheat quotations for the week fell by 3.2-6.3%, in particular yesterday – by 2.3-3.5% amid improving crop conditions and active harvesting campaign.

In the United States, as of July 14, winter wheat was harvested on 71% of the area (62% on average over 5 years), and its yield is higher than last year. the Number of spring wheat crops in good or excellent condition for the week increased by 2% to 77% (51% last year).

September futures for wheat declined yesterday:

• by 3.5% to 195.66 $/t – for soft winter SRW wheat in Chicago (-3.9% for the week),
• by 2.3% to 204.1 $/t – for hard winter HRW wheat in Kansas City (-3.2%),
• by 3% to 213.4 $/t – for hard spring HRS wheat in Minneapolis (-6.3%),
• by 3% to 213.5 €/t or 232.6 $/t – for wheat on the Paris Euronext (-3.6%).

News of unfavorable weather in France has not yet supported prices. According to FranceAgriMer, as of July 8, wheat was harvested on only 4% of the area (+3% per week), compared to 26% on this date last year and 19% on average over 5 years. And the number of crops in good or excellent condition is only 57% (58% a week ago, 80% last year). The condition of the crops is the worst in the last 4 years, as prolonged rains and lack of sunlight slow down the drying of moisture in the fields.

As of July 12, Ukraine harvested 5.7 mln tonnes of wheat from 34% of the area or 1.509 mln ha, yielding 3.77 t/ha, with yields and quality varying from region to region. Due to the heat to 35-42 ° C, the moisture content of wheat fell to 9-10%, which has already reduced the nature and may worsen the protein content.

Farmers are holding back wheat sales, which, amid high export demand and the rising dollar, keeps prices high, despite the decline in world prices. For milling wheat with delivery to the Black Sea ports offer 8800-9200 UAH/t or 190-195 $/t, for feed wheat – 8000-8300 UAH/t or 175-180 $/t.

According to the Rosario Grain Exchange, as of July 10, Argentina planted wheat on 5.85 million hectares or 92.9% of the planned area, with the expected harvest of 20.5 million tons, which is 3% lower than the harvest of 2023/24 MY of 21 million tons. Lack of precipitation and low temperatures worsen the condition of crops, although initially 97.2% of wheat crops were in good and excellent condition.

Tags: Ukraine, Russia, prices, France, wheat, Argentina