Fundamental factors increase pressure on wheat prices

Wheat prices rose on global stock exchanges last week, but lower oil and corn prices, as well as a slowdown in exports amid higher harvest forecasts for Argentina, Russia and the United Kingdom, will increase pressure on prices this week.

According to the Buenos Aires Grain Exchange (BAGE), in Argentina, wheat was harvested on 6.7% of the area, and the harvest forecast was raised by 600 thousand tons to 19.8 million tons (against the USDA forecast of 20 million tons).

AHDB experts have increased their forecast for wheat production in the UK in 2021/22 MG to 14.02 million tons, which is 45% higher than last year's harvest and will lead to a decrease in wheat imports compared to the previous season from 2.43 to 1.7 million tons.

In Russia, as of October 29, 77.9 million tons of wheat were threshed from 27.8 million hectares, or 97%, which is significantly higher than the USDA's October forecast of 72.5 million tons.

Wheat is trading everywhere on US stock exchanges, driven by low export sales and shipments and growing concerns about possible damage to weak winter crops expected this week by frosts.

Weekly export sales of wheat from the United States amounted to only 269.2 thousand tons, which does not meet expert expectations. Actual exports for the week amounted to 185.6 thousand tons, and in general since the beginning of the season reached 8.557 million tons, which is 20% lower than last year's pace.

December US futures rose:

• by 0 0.09 / ton to Чикаго 283.9/ton for soft winter SRW wheat in Chicago,
• by 5 5.42/ton to.386.6 / ton for hard spring HRS wheat in Minneapolis.

Hard winter HRW wheat in Kansas City fell by 1 1.56/ton to.288.7/ton.

France is accelerating the sowing of winter wheat, which, according to FranceAgriMer, is sown in 61% of the planned areas, which is only 2% lower than last year's pace. Precipitation that will pass this week will improve the condition of crops.

• December wheat futures on Paris ' Euronext rose 0.25 €/ton to 283.25 €/ton or 3 327.42/ton on Friday.

Quotes supported the depreciation of the euro to 1 1,155/€.

• December Black Sea wheat futures on the Chicago SWOT after updating the record last week fell on Friday by 3 3/ton to 3 335 / ton.

In Ukraine, prices for food wheat against the background of active export demand increased in ports to a record 302-305 $/ton or 9000-9100 UAH/ton.

The lack of precipitation in Ukraine and Russia worsens the potential of the future harvest, which supports wheat prices right now. However, the November balance sheet of the USDA with increased data on production in Russia and lower consumption against the background of low import rates may turn prices down.