Deterioration of winter wheat crops in the United States supports quotations

Russia's military aggression against Ukraine has been going on for 62 days, during which many cities and enterprises have been destroyed, people have died, and more than 12 million Ukrainians have been forced to flee their homes to escape the occupiers. Ukraine's ports remain blocked, almost halting export shipments.

Blocking Ukrainian exports remains a major factor in rising world prices. As a result of intensified hostilities in eastern and southern Ukraine, wheat production in the new season will decrease to 18-19 million tons, which will increase the risk of grain shortages for the entire planet.

Adverse weather in the United States and Canada could also have a negative impact on world wheat production in the 2022/23 MY. This supports new wheat prices, which are still lower than the old ones.

IGC experts predict that world wheat production in 2022/23 MY will decrease compared to the previous season by 1 million tons to 780 million tons.

According to StatsCan, Canada will increase its wheat sowing area by 2.94% to 24.15 million acres compared to last year, but a prolonged drought and cold spring could change the final figures.

According to the NASS Crop Progress report, as of April 24, 11% of winter wheat crops in the United States were ripe, compared to 19% on average over 5 years, indicating a delay in development due to cold. The number of winter wheat crops in good or excellent condition for the week decreased by 3% to 27% (49% last year), including in Texas only 8%, South Dakota - 17%, Oklahoma - 16%, Colorado - 17%, Montana - 19%, Kansas - 26%, as the southeastern states suffer from prolonged drought.

Due to the cold rainy weather, only 13% of the area was sown with spring wheat, compared to 24% last year and 15% on average over 5 years.

At those high prices, importers reduced their purchases, and in the week of April 15-21, wheat exports from the United States fell by 55% to 288 thousand tons, and in the season reached 18.7 million tons, which is 18.9% lower than last year. Even the suspension of exports from Ukraine did not increase supplies from the United States.

Wheat futures in the US yesterday traded as follows:

• for soft winter SRW-wheat in Chicago, May futures fell by $ 1.29 / t to $ 390.2 / t, and July - by $ 1.01 / t to $ 393.9 / t,
• for winter HRW wheat in Kansas City, May futures rose $ 0.92 / t to $ 420.8 / t and July futures rose $ 1.29 / t to $ 423.7 / t.
• for hard spring HRS-wheat in Minneapolis, May futures rose by $ 6.06 / t to $ 432.4 / t, and September - by $ 5.24 / t to $ 428.2 / t,
• May futures for Black Sea wheat in Chicago fell by $ 0.25 / t to $ 386.5 / t, and August futures rose by $ 0.25 / t to $ 353.25 / t.

Russian agencies, against the background of favorable winter weather and low freezing, have raised forecasts for wheat production in the country in 2022/23 MY, including experts Icarus - from 83 to 83.5 million tons, and SovEkon - from 86.5 to 87.4 million tons compared to last year's 76 million tons. It is expected that wheat exports from Russia in 2022/23 MY will increase compared to the current season from 33.9 to 41 million tons.

Despite the sanctions, Russia's grain terminals in Novorossiysk increased grain loading by 45% to 382,000 tons in a week, including 341,000 tons of wheat, 134,000 tons of which will go to Iran, 84,000 tons to Turkey and 30,000 tons to Egypt. .

According to FranceAgriMer, the number of winter soft wheat crops in France in good or excellent condition for the week decreased by 1% to 91%, well above last year's 85%.

• May wheat futures on Paris' Euronext rose 1.25 € / tonne to € 408.25 / tonne yesterday, but the dollar rose just to $ 438.2 / tonne as the euro depreciated to $ 1.073 / tonne. as September futures rose by 0.25 € / t to 367 € / t.

Against the background of good crop condition in the EU and the Black Sea region, prices for the new crop remain lower than for the old one, while in the US deteriorating crop conditions lead to higher prices for new crop wheat.