Wheat prices continue to fall amid improving US crop conditions

Last week, wheat quotations on world exchanges fell by 3.1-6% after a decrease of 2-4.4% in the previous week. Prices are under pressure from improved crop conditions and snow in major US winter wheat growing regions.

Yesterday, December wheat futures fell:

• by 2.8% to $196.3/t - for soft winter SRW wheat in Chicago (-3.1% for the week),
• by 2% to $216.8/t - for HRW hard winter wheat in Kansas City (-4.8%).
• by 1.8% to $251.5/t - for hard spring HRS-wheat in Minneapolis (-4.5%),
• by 2.8% to €213/t or $233.2/t - for wheat on the Paris Euronext (-6%).

According to yesterday's USDA report, 91% of the sown areas have sprouted winter wheat in the USA (89% on average over 5 years). During the week, the number of crops in good or excellent condition increased by 2% to 50% (34% last year), which allows us to hope for an increase in the harvest in 2024.

The export of wheat from the USA for the period of November 17-23 decreased by 24% compared to the previous week to 276.6 thousand tons, and in general in the season reached 8.124 million tons, which is 23.25 times lower than last year's pace.

European wheat quotes have not yet reacted to the news of a delay in sowing in France, where, according to FranceAgriMer, 74% of the planned area was sown with soft wheat on November 20, compared to 98% at this time last year. Rain has almost halted planting in France, with the number of crops in good or excellent condition for the week down 3% to 83% from 91% last year.

Information about the postponement of the loading of 300-400 thousand tons of French wheat purchased by China from December to 2024 increased the pressure on European wheat prices. In 10 months of 2023, China imported 10.8 million tons of wheat, which is 37.7% higher than the corresponding indicator of 2022, as the rains during the harvesting of its own wheat sharply worsened its quality.

According to the BAGE exchange, in Argentina, wheat has been harvested on 26.4% of the area, which is 14% higher than last year, and the average yield is also higher than in the previous season.

In Ukraine, 94% of the planned areas are sown with winter wheat. A drop in temperatures to -1...-5 ^o C stopped sowing, and recent rains improved the condition of the crops. Purchase prices for fodder wheat delivered to the port remain at $140/t or UAH 5,700-5,800/t, and export demand for Ukrainian food wheat is limited by active supplies of cheap wheat from the Russian Federation.