Global Wheat Buying and Weather Concerns Provide Market Support
On July 18, 2024, global wheat markets saw an uptick in prices, supported by fresh international purchases and weather concerns in key growing regions. The markets have firmed, reflecting the broader dynamics of global demand and climatic impacts on crop conditions.
Market Movements
Key market movements as of July 18, 2024, include:
- Chicago December 2024 Wheat: Up by 8 cents per bushel to 563.5c/bu.
- Kansas December 2024 Wheat: Increased by 10.5c/bu to 577.5c/bu.
- Minneapolis December 2024 Wheat: Rose by 14.25c/bu to 611.5c/bu.
- MATIF Wheat December 2024: Up by €1.25/t to €223.75/t.
- Corn December 2024: Increased by 3c/bu to 411.75c/bu.
- Soybeans November 2024: Decreased by 2.25c/bu to 1041c/bu.
- Winnipeg Canola November 2024: Up by C$10.30/t to C$631.50/t.
- MATIF Rapeseed November 2024: Increased by €8.50/t to €481.25/t.
- ASX January 2025 Wheat: Rose by A$2/t to $340/t.
- ASX January 2025 Barley: Unchanged at A$303.90/t.
- AUD Dollar: Down by 5 points to US$0.6729.
Global Market Dynamics
1. Wheat Purchases:
- GASC (General Authority for Supply Commodities) secured its largest wheat purchase since 2022 earlier this week, followed by Algeria buying 600-700k tons of wheat at US$241-$244/t C&F, primarily from the Black Sea region.
- Jordan issued a new tender for 120k milling wheat with a deadline early next week, having already secured a cargo earlier this week for late August shipment at $255/t C&F.
- Thailand diverged from the trend, passing on all offers (~$268 C&F).
2. Soybean Purchases:
- Reports indicate China has purchased 75 cargoes of Brazilian soybeans over the past two weeks, demonstrating robust demand from South America while US new crop soybean purchases remain minimal.
3. Weather Impact:
- The winter wheat harvest in Germany has begun, requiring a spell of dry and sunny weather for optimal progression. German farm cooperatives estimate 2024 wheat production at 20.20Mt, a slight decrease from the previous estimate and down 6.2% from last year. Winter rapeseed production is expected to decrease by 10% year-on-year to 3.8Mt.
- Heat in Eastern Europe and the Black Sea region during a crucial crop development period, along with strong US domestic demand for corn and high ethanol production, has provided additional support to the markets.
4. Canadian Crop Conditions:
- Saskatchewan’s canola crop condition remains above the long-term average, with Alberta’s crop slightly above average. Current estimates for Canadian canola production stand at 20Mt.
Australian Market Insights
In Australia, new season canola prices in the west remained steady, with minimal movements for wheat and barley. The east followed similar trends with modest gains in new season canola and stable prices for wheat and barley. Recent rains across New South Wales, Victoria, and South Australia have improved the seasonal outlook, particularly in regions like South Australia’s Eyre Peninsula and Victoria’s Western Districts.
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