For the third month in a row, wheat quotations on world exchanges remain quite stable

A fairly balanced November USDA wheat report and weak demand from importers are keeping wheat quotes low. And not even a decline in wheat harvest forecasts in Australia and Argentina can significantly support them.

As a result of the low amount of rain in the main wheat-growing regions in October, Refinitiv Commodities Research analysts lowered the forecast for the wheat harvest in Australia in 2023/24 MY by 1 million tons to 23.1 million tons, which would be 16.6 million tons less than the indicator of 2022/23 MY , although the USDA in November estimated production at 24.5 million tons.

USDA experts reduced the wheat harvest forecast in Argentina by 1.5 million tons to 15 million tons (12.55 million tons in FY 2022/23), while the Buenos Aires Grain Exchange estimates it at 15.4 million tons, and the Rosario Exchange - in 14.3 million tons.

December wheat futures rose slightly yesterday:

• by 0.6% to $212.7/t - for soft winter SRW wheat in Chicago (+0.5% for the week),
• by 0.2% to $235.7/t - for hard winter HRW wheat in Kansas City (-0.7%)
• by 0.6% to €233.75/t or $248.7/t - for wheat on the Paris Euronext (+0.6%).

At the same time, futures for HRS durum wheat in Minneapolis fell by 0.2% to $267.8/t (0%).

In the main exporting countries, the weather remains favorable for sowing winter crops, which restrains the increase in prices for the future harvest. As of November 12, 93% of the planned areas were sown with winter wheat in the USA (93% on average over 5 years), and 89% of the areas in Ukraine. Ukrainian farmers probably will not be able to sow all the planned areas, as frost and rain are forecast in the coming weeks.

According to preliminary estimates, wheat exports from the United States in the first week of November decreased compared to the previous week from 134.3 to 72 thousand tons, which is inferior to the lowest weekly export figure of 86 thousand tons recorded in December 2022. At this time of the year, wheat exports from the US is traditionally low, as exporters pay more attention to soybean sales, but this reduction in supplies was the largest since 1983, i.e. in the last 52 years. The reason that wheat shipments are significantly lower than sales may be due to logistical difficulties caused by low water levels in the Mississippi.

In 2023/24, the US MR exported only 7.443 million tons of wheat (10 million tons for this period last year) of the USDA forecast for this season of 19.05 million tons.

The other day, Chinese importers bought the largest batch of American wheat in the last year, and in total, on October 26, the USA sold 813 thousand tons of wheat to China for delivery in 2023/24, which is significantly higher than the 616 thousand tons of the previous season.