Wheat rose 3.5-5.6% based on USDA’s crop status report

According to the NASS USDA report, as of June 18 in the United States due to a lack of moisture, the number of spring wheat crops in good or excellent condition for the week decreased by 7% to 51% (59% last year). Winter wheat is threshed on 15% of the area (23% last year, 20% on average for 5 years on this date).

Due to the prolonged drought, the wheat harvest will be one of the worst in the last 50 years. In a June report, the USDA estimated it at 45.3 million tons, which would exceed the 44.9 million tons of the current non-harvest season, but be inferior to the 5-year average of 48.7 million tons.

The pressure on prices was increased by a decrease in harvest forecasts in the Russian Federation and Germany. SovEkon experts reduced the estimate of the wheat harvest in the Russian Federation by 1.2 million tons from 88 to 86.8 million tons, barley – from 20.8 to 19.9 million tons, corn – from 14.8 to 14.6 million tons. Forecast the wheat harvest was revised due to the deterioration of spring wheat sowing conditions in the main growing regions, in particular in Siberia and the Volga region, where soil moisture reserves are rapidly decreasing.

Against the background of dry and hot weather, the Association of Farmer Cooperatives of Germany reduced the forecast for the wheat harvest in 2023 by 2% to 21.87 million tons, which will be 2.9% lower than last year.

The export of grain from Ukraine through the grain corridor in May and June was very slow, as the Russian Federation continues to block it, sabotaging inspections and putting forward unrealistic conditions for extending the agreement after July 18.

July wheat futures rose yesterday:

• by 5.6% to $269.9/t – for soft winter SRW wheat in Chicago (+16% for the week),
• by 4.5% to $321/t – for hard winter HRW wheat in Kansas City (+11%).
• by 3.5% to $322.9/t – for hard spring HRS-wheat in Minneapolis (+7.8%),
• by 0.1% to $237.25/t – for Black Sea wheat in Chicago (-0.5%).
• by 3.3% to €247/t or $260.8/t – September wheat futures on the Paris Euronext (+5.9%).

In 2022/23, EU countries increased wheat exports by 11% to 31.3 million tons compared to the same period of the previous season, including soft wheat by 13% to 30 million tons. At the same time, durum wheat exports decreased by 27% to 0.713 million tons, and soft wheat flour – by 14% to 0.443 million tons.

France remains the largest exporter of wheat in the EU (10.2 million tons), followed by Romania (4.2 million tons) and Germany (3.7 million tons). The main buyers of soft wheat from the EU were Morocco (4.7 million tons), Algeria (4.1 million tons), Nigeria (2.8 million tons) and Saudi Arabia (1.5 million tons).

China, which is the world’s largest importer of soybeans and corn, may become the world’s main buyer of wheat in 2022/23, as it has imported more than 1 million tons of wheat every month since October 2022, including a record 1.68 million tons in April 2023 During the 11 months of the current season, he imported 12.7 million tons of wheat, of which 7.8 million tons came from Australia, 2.6 million tons from Canada, 1.1 million tons from the USA, and 1 million tons from France. and 0.2 million tons from other countries.