Wheat exchange quotes started the week with a fall of 2-4%

Abundant precipitation in the dry regions of the US wheat belt and snow in parts of Kansas and Colorado eased concerns about soil moisture deficits and provided protection for winter crops ahead of the forecast frost. In the states of Texas and Oklahoma, precipitation of 2.5-7.5 cm is expected, which will replenish soil moisture reserves after a dry autumn. Against this background, quotations on the US stock exchanges fell by 3-4%, followed by European stock exchanges, which also fell by 2%.

Also weighing on the market are lower prices for corn and soybeans amid good rainfall in southern and central Argentina, as well as rains forecast for the current week that will ease drought conditions.

Yesterday, quotes fell:

• by 3% or $7.9/t to $264.6/t – March futures for soft winter SRW wheat in Chicago,
• by 3.7% or $10.66/t to $300.9/t - March futures for HRW hard winter wheat in Kansas City,
• by 2.9% or $9.19/t to $326.2/t - March futures for HRS durum wheat in Minneapolis,
• by 0.4% to $306.5/t - February Black Sea wheat futures in Chicago,
• by 2% to €279.25/t or $303.84/t - March wheat futures on the Paris Euronext (-3% for the week).

During the week of January 13-19, wheat exports from the USA grew by 2.6% to 334,000 tons, and the total for the season reached 12.76 million tons, which is 3.7% less than last year's pace. To reach the USDA forecast, 480,000 tons of wheat must be exported every week until the end of the season.

Agriculture and Agri-Food Canada (AAFC) experts in a January report estimated wheat production in Canada in 2023/24 MR at 34.3 million tons, which will exceed the previous season by 1.5% thanks to the expansion of sowing areas.

Against the background of active demand, prices for Russian wheat with a protein of 12.5% remain at the level of $300-306/t FOB, and exports for the week increased from 670 to 800 thousand tons, and in general in January may reach 3.7 million tons compared from 2.7 million tons in January 2022. According to Rosstat, in December wheat stocks in the Russian Federation increased to 22.1 million tons, while in December 2021 they amounted to 13.8 million tons.

In India, wheat prices rose to a record high on January 23 after the government delayed sales of wheat from state reserves to cover a shortfall caused by last year's poor harvest, according to Reuters. For this purpose, the government plans to sell 2-3 million tons of wheat. And in March, the new harvest will begin, which will be quite large thanks to abundant rainfall.