Wheat quotations for the day collapsed by 3.6-6%, losing the weekly growth

Wheat futures on the US exchanges collapsed yesterday, despite the deterioration of the spring wheat crop and the delay in harvesting winter wheat in the US. Following them, prices for European wheat fell.

Yesterday, July futures fell in price:

• by 6% to $251.7/t – for soft winter SRW wheat in Chicago,
• by 3.6% to $307.8/t – for hard winter HRW wheat in Kansas City,
• by 3.6% to $306.2/t – for hard spring HRS-wheat in Minneapolis,
• by 4.1% to €236.5/t or $259/t – September wheat futures on the Paris Euronext.

In addition, prices are pressured by data on the high yield of winter wheat in the south of the Russian Federation, where harvesting has begun, and the increase in wheat harvest forecasts.

According to NASS USDA’s Crop Progress report, as of 06/25/23 heavy rains in the U.S. have resulted in only 24% of winter wheat harvested (39% last year and 33% 5-year average), while analysts expected 29 %. The number of winter wheat crops in good or excellent condition per week increased by 2% to 40% (30% last year), and spring wheat – decreased by 1% to 50% (59% last year).

Thanks to high temperatures and precipitation, spring wheat in the US is maturing faster than usual, with 31% of the crop now maturing (7% last year and 25% 5-year average). Experts believe that rapid ripening leads to a decrease in productivity. Farmers in Kansas report a wide variation in winter wheat yields, from 0.67 to 4.7 t/ha, depending on the severity of the drought in the region.

In the report of the European monitoring service MARS published on June 26, wheat production in the Russian Federation is forecast at 86.7 million tons, which will be 17% lower than the record figure of 2022 and 4% higher than the 5-year average and the June USDA estimate of 85 million tons. of winter wheat will decrease by 15% to 62.6 million tons compared to 2022, and of spring wheat by 20% to 24 million tons.

The Ukrainian Agribusiness Club (UKAB) forecasts the wheat harvest in Ukraine in 2023 at the level of 16.3 million tons, while the USDA estimated it at 17.5 million tons in June.

Turkey’s National Grain Board (UHT) has raised its wheat harvest forecast from 20.75 to 21.5 million tonnes amid heavier-than-expected March-May rainfall.

Tags: Russia, Turkey, prices, wheat, USA