Gains in US and European Wheat Markets Amid Weather Challenges in Key Growing Regions
The global wheat market experienced mixed movements this week as harvest conditions and weather anomalies influenced prices across various regions. Notably, wheat markets in the US and Europe posted slight gains, while other agricultural commodities faced downward pressure.
The Chicago December 2024 wheat futures rose by 3.25 cents per bushel, closing at US566.5c/bu. Similarly, Kansas and Minneapolis December 2024 wheat futures saw modest increases, settling at 578.25c/bu and 612.25c/bu, respectively. In Europe, the MATIF wheat December 2024 contract edged up by €1.50 per tonne to €224.75/t.
Conversely, other crops faced declines. Corn December 2024 futures dropped by 1.75 cents per bushel to 405.25c/bu, and November 2024 soybean futures fell by 14 cents per bushel to 1026.75c/bu. Winnipeg canola November 2024 futures plummeted by C$23.30 per tonne to $587.60/t, and MATIF rapeseed November 2024 futures decreased by €4 per tonne to €449.75/t. In Australia, ASX January 2025 wheat dipped by A$0.50 per tonne to $334/t, while barley remained unchanged at A$295/t.
International Context
The Black Sea region’s analyst SovEcon reported record-high Russian wheat stocks, reaching 20.3 million tonnes as of July 1, a 21% increase compared to the previous year. This record was attributed to an early start to the harvest season due to unusual weather patterns, which allowed for the harvest of approximately 6.9 million tonnes of wheat by early July, significantly higher than the 0.2 million tonnes harvested in the same period last year.
However, SovEcon also revised down its corn production estimate for the 2024-25 season by 2 million tonnes to 25.6 million tonnes due to hot and dry weather conditions. Similarly, UkrAgroConsult lowered its Ukraine corn production forecast by 1.4 million tonnes to 26 million tonnes, citing unseasonably hot and dry weather in key growing areas.
In Egypt, the General Authority for Supply Commodities (GASC) is seeking to procure 3.8 million tonnes of wheat from various origins through a tender set for August 12. The tender requires offers to be submitted on a free-on-board (FOB) basis, with payment within 270 days and shipping scheduled monthly, except in February.
France is anticipated to experience its worst soft wheat harvest in over 40 years, with production expected to fall to 25.2 million tonnes, a 27% decrease from the five-year average. Excessive rainfall, coupled with low temperatures and lack of sunshine, has negatively impacted yield and quality across most growing regions.
US and Brazilian Developments
Crop consultant Michael Cordonnier increased his US corn and soybean yield projections, citing favorable weather conditions at the start of August. His revised estimates are now 182 bushels per acre for corn and 52.5 bushels per acre for soybeans, raising the production estimates to 15.02 billion bushels for corn and 4.42 billion bushels for soybeans.
In Southern Brazil, wheat crops planted earlier this year and currently in the grain-filling stage might face frost damage due to forecasted cold weather. The regions of Rio Grande do Sul, Santa Catarina, and Paraná are expected to experience frost by August 10 and again on August 13.
Australian Market Insights
Australian markets saw significant declines, particularly for canola, which dropped around A$25 per metric tonne due to volatile global financial market conditions. Southern Australian growers are closely monitoring the weather forecast, as warmer-than-average temperatures and lack of meaningful rainfall continue to pose challenges, particularly in Victoria and South Australia. Meanwhile, Western Australia has received recent rainfall, boosting confidence and yield expectations for the season.
Current lineups data indicate 1.81 million tonnes of total grain scheduled for August shipment, including 885,000 tonnes of wheat, 261,000 tonnes of barley, 422,000 tonnes of canola, and 244,000 tonnes of sorghum. Port congestion varied last week, with an average wait time of less than seven days and a total of nine vessels either anchored or loading at Australian grain ports.
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