A possible increase in the forecast for wheat production in the United States is putting pressure on quotations
The wheat market will trade flat this week in anticipation of the new balance sheet from the USDA, in which traders expect to see an increase in crop estimates for Ukraine, the US and the Russian Federation, as well as an increase in inventories. Favorable weather in Canada and the Russian Federation improves spring wheat harvest prospects, while in Argentina, drought worsens the condition of crops.
In the August report, the MSG of the MSA will update data on wheat acreage, and an increase in spring wheat acreage may come as a surprise to the market. Analysts expect an increase in stocks and production of wheat in the US.
The cost of freight for ships calling at Russian ports has risen as shipowners and insurance companies have increased their premiums for the risks that Ukraine will continue to raise with new drone attacks on Russian warships.
Yesterday, September futures fell 1-3.4%, losing Monday's speculative gains, including:
- by 3.4% to $233.3/t - for soft winter SRW wheat in Chicago,
- by 1.2% to $279.8/t - for hard winter HRW wheat in Kansas City,
- by 1.4% to $301.2/t - for hard spring HRS-wheat in Minneapolis,
- by 0.1% to $245/t - for Black Sea wheat in Chicago,
- by 1% to €242.25/t or $266/t - for wheat on the Paris Euronext.
The Ukrainian wheat market is worried about the low quality of the grain of the new crop, caused by the precipitation in July, although it increased the yield. According to preliminary data, the share of food wheat will be only 20-40% compared to the usual 60-70%. Many traders have started buying food wheat and stopped buying fodder due to supply uncertainty.
