Wheat Prices on the Exchanges Fell Again by 2.5-6% Over the Week, Completely Nullifying the Growth Since Early May
Amid active winter wheat harvesting, favorable conditions for the planting and development of spring wheat in the United States, and forecasts of precipitation in the east and center of Ukraine and the southwestern part of Russia, wheat prices on global exchanges continued to decline. Over the week, prices fell by 2.5-6%, and in the first two weeks of June, prices dropped in the United States by 10.7-12.5% and in Paris by 9.4%.
On Friday, July wheat futures fell:
- By 1.2% to $224.9/t for SRW wheat in Chicago (-2.5% for the week),
- By 1.5% to $230.6/t for HRW wheat in Kansas City (-6%),
- By 1.8% to $240.9/t for HRS wheat in Minneapolis (-5.9%),
- By 0.7% to €236.75/t or $253/t for September wheat futures on Euronext in Paris (-3%).
Amid the sharp rise in wheat prices on the exchanges, Russian exporters again benefited, continuing to increase wheat exports in June, as the spread between French and Russian wheat reached $25/t, boosting demand for Russian wheat. The analytical center "SovEcon" forecasts that Russian wheat exports in June will amount to 3.5-4.0 million tons compared to 3.6 million tons a year earlier and 1.6 million tons on average.
With the start of the new harvest, sellers from the US and the EU will again face a decrease in demand for wheat and aggressive export policies from Russia. Turkey's decision to suspend wheat imports from June 21 to October 15, 2024, will reduce demand for Russian wheat. Additionally, India's new Minister of Agriculture confirmed that the government will not lift import duties on wheat to support local farmers.
An increase in production forecasts in Australia and Argentina amid favorable planting conditions is also putting pressure on prices.
The Rosario Grain Exchange raised its forecast for wheat production in Argentina in the 2024/25 marketing year to 21 million tons from 15.85 million tons this season, approaching the record 22.15 million tons set in the 2021/22 season, due to an increase in sowing areas to a record 6.92 million hectares due to the need for crop rotation in the central and northern parts of the country.
