Wheat quotes fell by 1.7-2.8% yesterday amid favorable conditions for spring wheat sowing, which will lead to lower prices for old wheat harvest

Weather conditions favorable for sowing winter wheat in Argentina and spring wheat in Canada, the Russian Federation and the US increased pressure on new harvest wheat quotes, which fell by 1.7-2.8% per day, completely losing last week’s growth.

According to the USDA’s weekly report, as of May 25, 87% of the planned area was sown with spring wheat (7% more than the 5-year average), and seedlings were obtained on 60% of the area (7% more than the average). During the week, the number of winter wheat crops in the United States in good or excellent condition decreased by 2% to 50% (48% last year).

Experts from the Rosario Grain Exchange predict an increase in wheat sowing areas in Argentina in 2025/26 MY to 7.2 million hectares and the second largest harvest at 21.2 million tons (18.5 million tons in MY 2024/25) due to heavy rainfall at the beginning of the sowing season and a reduction in wheat export duties.

The EU Crop Monitoring Service (MARS), against the backdrop of favorable rains for crops in southern Europe and the so far limited impact of drought on crops in the north of the region, has increased the forecast for the yield of common wheat in the EU in 2025 from 6.03 to 6.04 t/ha, and durum – from 3.69 to 3.77 t/ha.

July wheat futures in the US fell yesterday:

• by 2.7% to $194.2/t – for soft winter SRW wheat in Chicago (unchanged for the week),
• by 2.8% to $192.7/t – for durum winter HRW wheat in Kansas City (+0.4%),
• by 1.7% to $219.1/t – for durum spring HRS wheat in Minneapolis (+1.8%).

September wheat futures on the Euronext Paris exchange fell 2.1% yesterday to €201.25/t or $227.8/t (-0.5%).

High demand for cheap American wheat remains, but this will not help achieve the USDA export forecast, so stocks at the start of the new season will grow slightly.

Wheat exports from the US during May 15-22 increased by 30.3% compared to the previous week to 56.98 thousand tons, and in total for the season reached 21.27 million tons, which is 16.3% higher than last year’s pace, and in one week remaining before the end of the season, it is unlikely to reach the USDA’s projected 22.3 million tons.

Wheat exports from the EU in the MY 2024/25 (as of May 18) amounted to only 18.5 million tons, which is 34% lower than last year’s pace, and 6 weeks before the end of the season, EU countries will be able to ship about 1-1.5 million tons more, so total exports will be 5-6 million tons less than the USDA’s forecast of 26.5 million tons, which will also increase stocks for the beginning of the new season.

The fall in prices for the new crop continues to reduce demand and prices for the old crop of wheat. Thus, prices for Russian wheat (12.5% protein) for delivery in June fell by $8/t to $240/t FOB in a week, and for the new crop – to $225-229/t FOB, as wheat from France is currently offered at $229/t, from Argentina – at $233/t, Australia – $247/t and the USA – $226/t FOB.

Wheat exports from Russia for 20 days in May amounted to 1.2 million tons, which is 2.7 times less than for the same period in 2024.

Traders estimate that Australia’s ending wheat stocks this season could reach 8 million tonnes due to reduced exports to China and high competition on the world market from Russian wheat. For example, from October to March MY 2024/25, Australia supplied only 546 thousand tonnes of wheat to China compared to 2.9 million tonnes a year earlier, Reuters reports.