Wheat prices fell for the week by 2.3-4.6%, despite the decrease in forecasts of the world harvest and exports

In the September report, IGC experts reduced the forecast of world wheat production in 2023/24 MR from 784.1 to 783.5 million tons, which will be 21.2 million tons less than the indicator of 2022/23 MR, compared to August estimates.

In particular, harvest estimates were reduced for Argentina from 17.5 to 16.5 (12.6 in 2022/23 MR) million tons, Australia – from 27.9 to 25.4 (39.7) million tons, Canada – from 31, 5 to 29.8 (34.3) million tons, the EU - from 133.3 to 132.5 (133.8) million tons, while it was increased for the Russian Federation - from 84.4 to 87.4 (95.4) million tons, Ukraine - from 24.5 to 25.9 (26.3) million tons, although the MSG of Ukraine estimates the harvest at 22 million tons.

The global wheat export forecast was reduced from 197.2 to 195.9 (207.8) million tons, in particular for Argentina – from 12.4 to 11.5 (4.5) million tons, Australia – from 21 to 19 (31, 5) million tons, Canada - from 24.2 to 22.7 (25.2) million tons, while for the Russian Federation the estimate was increased from 46.6 to 48.6 (47.8) million tons.

The estimate of world final reserves in 2023/24 MY was increased from 260.9 to 262.6 (282.5) million tons, in particular for Argentina - from 2.2 to 2.3 (3.3) million tons, Australia - from 1 .8 to 2.2 (3.2) million tons, Canada – from 2.8 to 3.2 (3.8) million tons, Kazakhstan – from 1.8 to 2 (2.6) million tons, the Russian Federation – from 10.4 to 10.7 (15.3) million tons, Ukraine – from 2.8 to 4.3 (2.5) million tons, while the estimate for China was reduced from 137.9 to 138.4 (140 ,3) million tons and the EU - from 13.8 to 13.2 (19) million tons.

Against the background of the successful exit of two ships with wheat from the Black Sea ports of Ukraine through the corridor temporarily established by the Navy of the Armed Forces of Ukraine, as well as the loading of three more ships, stock exchange wheat quotations fell by 2.3-4.6% last week.

As of September 22, Ukraine exported 2.91 million tons of wheat compared to 2.45 million tons on this date last year, but it is worth noting that demand prices for wheat are significantly lower than last year, and mainly feed grain is exported.

December futures rose on Friday:

• by 0.2% to $212.1/t - for soft winter SRW wheat in Chicago (-4.6% for the week),
• by 0.3% to $262/t - for hard winter HRW wheat in Kansas City (-4.7%).
• by 0.5% to $283.4/t - for hard spring HRS-wheat in Minneapolis (-2.3%).

At the same time, the price of wheat fell by 0.2% to €235.75/t or $251/t on the Paris Euronext (-3.3%).

The lack of soil moisture during the period of active sowing in Ukraine and the south of the Russian Federation will increase the pressure on quotations in the near future, but the activation of wheat exports through the Black Sea ports of Ukraine will increase the volume of offers of cheap feed grain on the world market.

In the Russian Federation, against the background of an increase in the export duty, there is a congestion of ports and warehouses of agricultural producers, which leads to a drop in domestic prices and export prices for wheat.