Wheat quotes continue to fall, despite the deterioration of crops in the US and France

Wheat and corn markets remain under pressure from USDA reports of increased U.S. corn acreage. However, traders were not active on the eve of the US Independence Day on July 4, so the quotations almost did not react to the next decrease in the forecast of the wheat harvest in the EU, the deterioration of the state of crops in the USA and France, and the activation of exports from the USA.

According to the NASS Crop Progress report, in the USA as of July 2, winter wheat was harvested on 37% of the area (52% last year and 46% on average for 5 years). During the week, the number of winter wheat crops in good or excellent condition did not change and amounted to 40% (31% last year), and spring wheat – decreased by 2% to 48% (66% last year).

During the period of June 23-29, the export of wheat from the USA increased by 65% compared to the previous week to 336.3 thousand tons, and in general in the new season (from June 1) amounted to 1.09 million tons, although last year at this time it reached 1.6 million tons.

The experts of the European Commission reduced the forecast of soft wheat production in the EU in 2023/24 MR by 2.7 million tons to 128.9 million tons, which will exceed the indicator of 2022/23 MR by 3.2 million tons. The wheat export forecast was left at the level of 32 million tons (31 million tons in 2022/23MR), and the domestic consumption forecast was increased by 1.5 million tons to 101 million tons (98.9 million tons). And the estimate of final stocks of wheat was reduced by 3.4 million tons to 20.5 million tons, which will correspond to the level of 2022/23 MR.

According to the monitoring data of FranceAgriMer, in France during the week the number of soft wheat crops in good or excellent condition decreased by 2% to 81% (64% last year), and durum wheat – by 8% to 69% (56% last year).

September wheat futures fell yesterday:

• by 1.4% to $235.8/t – for soft winter SRW wheat in Chicago,
• by 0.4% to $292.7/t – for hard winter HRW wheat in Kansas City,
• by 1% to $297.3/t – for hard spring HRS-wheat in Minneapolis,
• by 0.4% to $236.5/t – for Black Sea wheat in Chicago,
• by 2% to €226.25/t or $246.7/t – for wheat on the Paris Euronext.

In Ukraine, wheat purchase prices remain at a low level of $160-170/t for deliveries to the Danube and Black Sea ports. But the prices are gradually decreasing following the world prices and under the pressure of the approach of the new harvest. International traders are stopping purchases at Black Sea ports due to the likely closure of the grain corridor after July 18, and deliveries to Danube ports for transshipment to panamax through the port of Constanta are associated with additional costs, which lowers prices for farmers.