Wheat futures on world exchanges decreased by 2-4.4% for the week

Under the pressure of increased forecasts of world production and low demand from buyers, wheat prices on world exchanges last week fell by 2-4.4%, which became the biggest weekly drop in the last 2 months.

In the November report, IGC experts increased the forecast of world wheat production in 2023/24 from 784.9 to 786.6 million tons, which will be 2% less than the 2022/23 indicator. For Ukraine, thanks to the adjustment of sowing areas and yield, the production estimate has been increased by 0.7 to 28.7 million tons, which will exceed the 2022/23 MR harvest by 7%. For the EU, the production forecast was increased from 132.4 to 133.2 (133.3 in 2022/23 MR) million tons, and for the Russian Federation - from 89 to 90 (95.4) million tons. At the same time, due to unfavorable weather, the production forecast for Argentina decreased by 0.9 to 14.7 (12.6) million tons, for Kazakhstan – by 0.5 to 12 (16.4) million tons, and for Brazil – by 0.8 to 9.6 million tons, which will be the second largest harvest in history. The estimate of world reserves in FY 2023/24 was increased by 1 million tons to 264 million tons, and the export forecast was reduced by 0.8 to 195.7 million tons.

December wheat futures fell on Friday:

• by 0.5% to $202.4/t - for soft winter SRW wheat in Chicago (-4.4% for the week),
• by 1.5% to $227.1/t - for hard winter HRW wheat in Kansas City (-3.6%).
• by 1.5% to $262.9/t - for hard spring HRS-wheat in Minneapolis (-2%).

At the same time, December wheat futures on the Paris Euronext rose by 0.1% to €225.75/t or $247.5/t (-2.9%).

The StoneX agency lowered its forecast for Brazil's wheat harvest from 10.53 to 9.28 million tons from earlier estimates due to hot and dry weather, while Argentina's grain exchange lowered its estimate for the crop from 15.4 to 14.7 million tons.

According to USDA Grain's forecast, Egypt will increase wheat imports by 6.9% compared to last year to 12 million tons, of which 5-5.5 million tons will be purchased by the state-owned GASC, which has already imported 1.6 million tons of wheat.

In India, wheat sowing began on October 1, with 8.6 million hectares currently sown, which is 5.5% less than last year's pace due to the delay in rice harvesting. But the country's MSG expects farmers to increase the area planted to wheat thanks to high wheat prices.